Prospects for exports of British lamb appear poor
By FW reporters
DESPITE widespread backing by producers for the Farmers First share offer, export opportunities for British lamb are unlikely to increase, says the Meat and Livestock Commission.
With the domestic sheep market lacking vigour – prices are similar to last year despite a fall in slaughterings – overseas sales, worth £196m, will play a decisive role in determining returns to producers.
In the latest Sheep Market Outlook, MLC economists have pencilled in exports at 100,000t a year through to the end of 2001. That is unlikely to help prices, which have lagged well behind those across the Channel (see graph).
A reduction in the UK breeding flock, expected to fall by 1.7% to 20m head this year, might have eased pressure on prices, but a fall in consumption is likely to cancel out any benefit.
The MLC is not alone in forecasting a stalemate. John Kearns of Lloyd Maunder, a big supplier to the French market, believes that unless the strong £ weakens dramatically sales will suffer. "I cannot see any improvement unless we get nearer an 8F/£ exchange rate instead of the current 10F/£."
But a dramatic fall in the £ is unlikely until the single currency is introduced in 2002, suggested Nat Wests Brian Montgomery speaking at this weeks Sheep 2000 event at Malvern, Worcs.
In the meantime, marketing would remain a priority. "It is a big challenge for sheep producers, but we have already seen the beginnings of small-scale beef exports at a time when sterling is extremely strong," he said.
Farmers Firsts David Owen agreed that marketing could get results. "We are starting to see more interest, particularly from Spain, now buyers realise that we can guarantee both live and on-the-hook trade."
The company is shifting 10,000 lambs a week with an average carcass weight of 20kg. Live exports should at least match the 1m shipped last year giving a combined carcass equivalent of 25,000t. But if expectations for the live trade are met, the total could be as high as 32,500t, he says.
However, home and export markets had to increase the appeal of lamb to younger consumers, warned MLC director general Gwyn Howells. "70% of lamb is eaten and enjoyed by people over 45. Young people like eating roast lamb at their parents, but not when they go back to their flats. The problem is to provide lamb in a way that suits their lifestyle."
• Stability in the pig market should continue, suggests the latest MLC Pig Market Outlook. Sow slaughterings have slowed but new pig diseases in the east are affecting output, which could be down 11% on last year. The UK is to remain a net importer as a result.
Imports of pork could rise by 7000t next year although bacon should remain static. Although the price gap between UK and EU supplies has narrowed, it is still wide enough to attract Continental produce. And, while unit closures in northern EU states may reduce supplies initially, expansion in the south will compensate eventually, says the MLCs Mick Sloyan.