Warning that lamb recovery is temporary

3 September 1999

Warning that lamb recovery is temporary

LAMB values have climbed, reflecting seasonal buying, retailer promotion and overseas demand, but the recovery may only be temporary, auctioneers warn.

The reversal has pulled prices back from the high 60p/kg to 75p/kg seen over the past three weeks and may continue. Mondays trade at northern markets such as Skipton put premium sorts (36-45.5kg) at about 76p/kg and prime lambs to 69p/kg.

And there is clear demand for lambs with sufficient finish, reports auctioneer Morris Wall of Highbridge, Somerset. Prices for medium and heavy sorts have both hit 80p/kg pushed on by local butchers. "Weve two buyers each looking to take 100 lambs a week and that helps the averages. But many lambs have not been fed enough to put flesh onto their frame.

"Prices may encourage some producers to feed lambs to gain that extra finish. Some will still say they cant afford to; others that they cant afford not to," adds Mr Wall.

As live exports to countries such as France move towards a seasonal peak, light and super-light lambs are also feeling the benefit of more demand, says John Jones of Welshpool market. "It may just help hold prices," he comments.

According to the latest MLCs UK market survey the impact of greater demand has seen the SQQ rise by 3p/kg to 74.5p/kg, although this is still 18p/kg down on last year.

That difference can be largely attributed to the increase in number of lambs marketed. Latest MAFF figures suggest there are about 40,000 more being marketed weekly compared with last year.

But prices could be heading for another fall, warns John Bailey of Lloyd Maunder. The demand for lamb surged as buyers prepared for last weekends Bank Holiday with several supermarkets promoting lamb as the meat to eat, he says. "Were now seeing more grass about and can expect to see numbers of finished lambs build again."

That will affect prices which saw deadweight sellers achieve a base price of £1.66/kg; equivalent to £1.78/kg for a premium quality, farm assured, supermarket-spec lamb. "Over the next week we could see prices come back by as much as 12p/kg," suggests Mr Bailey.

Other factors may also affect the trade. The skin market remains volatile despite a short-lived recovery in recent weeks which some believe helped trigger the revival in lamb prices. According to Paul Pearson of the British Leather Confederation any improvement is "fragile".

But given the numbers already marketed, the trade reckons prices could improve later in the year giving a welcome boost to those producers who traditionally sell hoggs into the New Year. "We may even see a return to a normal hogget season typical of a few years ago. Deadweight prices may be £2/kg, or £42 for a 42kg hogget in the auction ring," adds Mr Bailey. &#42

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