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New Season Lamb Prices Looking Positive for Producers

31 May 2016

UK - As the volume of new season lambs reaching the market begins to increase, the market place is beginning to adjust to the start of the new season.

Indeed, new season lamb prices have started the season on a positive note for producers and, at recent sales, prices have been around 7-8 per cent higher than this time last year, according to the latest analysis by Quality Meat Scotland (QMS).

“With the Muslim festival of Ramadan starting on the 6th of June there may be some short term support for prices which may repeat itself as the festival ends in one month’s time,” said Stuart Ashworth, Head of Economics Services with QMS.

Nevertheless, a cold spring has resulted in new season lambs being slightly slower to appear on the market than last year, he said.

In England the volume of new season lambs reaching the market has only exceeded the volume of hoggs, which is tailing off quickly, in the past week. In Ireland new season lambs have exceeded old season for a few weeks now but in Scotland the volume switch over has not occurred yet.

In general though, hoggs have been in tighter supply with the weekly UK kill lower than last year throughout the first four months of the year. Carcase weights have also been lighter reducing domestic supplies of prime sheepmeat.

“Scottish auction sales of hoggs in April and May have been lower than last year. However, a subdued export market in the first quarter of the year meant that this reduced domestic supply did not support producer prices, which for much of the first quarter of the year ran lower than the previous year,” said Mr Ashworth.

French slaughter statistics show an increase in French domestic lamb production over the first quarter of 2016. This is despite the continued decline in the French breeding flock where the number of meat-producing ewes was reported to have declined 2.4 per cent in the December 2015 French sheep census. Additionally, ewes kept for dairy production fell 0.5 per cent (dairy ewes make up around 25 per cent of the French ewe flock).

“This decline in sheep numbers is leading France to estimate a 1 per cent decline in sheepmeat production during 2016 so the increase in the first quarter is likely to be a short term feature,” observed Mr Ashworth.

While UK hogg slaughterings have been lower since the turn of the year, ewe slaughterings have increased significantly. This, he said, may suggest heavy culling since scanning or greater numbers of cull ewes being held for further finishing.

The latter management practice may explain some of the reported increase in breeding sheep numbers that occurred in the December census drawn from the sheep and goat inventory.

This increase in ewe slaughterings since the turn of the year has also been repeated in the Republic of Ireland. This heavier supply of cull ewes is reflected in lower farmgate prices for this class of stock throughout 2016 to date.

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