AHDB Cattle and Sheep Weekly
09 January 2015
Positive lamb trading for the start of the New Year
With the Christmas and New Year holiday periods over, the liveweight lamb trade is back to a more normal trading week. The fluctuating trade over the holiday fortnight appears to have been replaced by a return to some positivity in the trade. In week ended 7 January the OSL SQQ averaged 187.6p/kg. At this price, in the first week of the year lambs have been trading around 7p ahead of the corresponding week last year which appears to confirm the seasonal uplift evident throughout December has been maintained. As the week progressed, throughputs at GB auction markets picked up but prices continued to hold up. The SQQ averaged 187.5p/kg on Monday 5 January but had moved up to 188.6 by Wednesday. Current indications for Thursday’s trade suggest a continuation of the stability in the trade. Additionally, the cull ewe trade at auction marts has also started the year robustly. Averaging over £85 per head in the latest week, cull ewes are trading over £30 up on a year earlier as demand remains firm.
Despite the fine balance in the market at the moment, the tighter than expected supply of lambs through the autumn gives rise to the expectation that the market will be well supplied in the short term. Demand, at home and abroad, will need to respond to the higher supply if price falls are to be avoided. The relatively early date of Easter could help, at least limiting the length of any subdued prices.
Producer share of retail price highest for six months
The producer share of the retail price of lamb in December increased on the month before. Up four points on the month, the measure reached 54%, its highest position in the last six months and its biggest December share since 2011. This was a direct consequence of a fall in in the average retail price, on the back of promotional activity, against the backdrop of a return to a seasonal increase in farmgate lamb prices. Not reflective of the position throughout much of the second half of the year, when the producer had received a lower share than a year earlier, at this level, the measure was three points ahead of its level in December 2013.
According to the EBLEX retail price survey the fall in the average retail price of lamb was driven by whole legs in particular, as well as diced lamb for stewing being discounted ahead of the festive season.
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