AHDB Cattle and Sheep Weekly
24 March 2015
Lamb trade still relatively firm
As Easter approaches and despite prices tracking just below last year’s position, for another week the lamb trade has demonstrated some degree of positivity. In week ended 18 March, despite more lambs coming forward at GB auction marts, trade still moved up. The OSL SQQ increased 3p on the week to break through the 200p/kg threshold for the first time this year at 200.5p/kg. Firm prices have also continued into Thursday, with the provisional (5pm) SQQ reaching 203.1p/kg. Despite this apparent positivity, in the fortnight prior to Easter last year the SQQ at auction marts averaged around 217.0p/kg. Demand will need to perform well for prices in that range to be achieved this year. The cull ewe market is also continuing its positive performance. With 10% fewer ewes forward the average value in the latest week was almost £85 per head, significantly ahead of this time last year.
The deadweight lamb trade has also been robust in the latest week. With estimates suggesting that fewer lambs were processed, in week ended 14 March the OSL SQQ moved up 5p to average 442.8p/kg, trading close to prices at this time last year.
Sheep meat imports lower in January
According to latest HMRC data sheep meat imports in January were reported to be back 17% on the year at 7,000 tonnes. This came as a result of significantly lower shipments from New Zealand. However, this does seem to be an anomaly in light of production developments and subsequent export data from New Zealand, even with reports of some of the increased product going into stocks. It would to some extent explain some of the robustness on the domestic market during the month. Shipments from Australia were up over 20% on the year.
The export data for January looks like it does not fully indicate the true picture again, showing a decline to the main markets, France, Germany and Hong Kong. Despite the possibility of some difficulties on the French market, with domestic farmgate prices continuing to hold up against the backdrop of increased production, intelligence would still suggest that export trade data in recent months may not reflect the true position of the sector.
Difficulties on the French lamb market
Lamb consumption in France fell last year for the seventh consecutive year. So far in 2015, it has been described as “morose” by the Institut de l’Elevage. Although it should pick up in the run up to Easter it has not been helped by retail prices remaining higher than in 2014, as there have been shortages of both domestic lamb and imported lamb in 2015 so far. For United Kingdom trade with France, the expected on-going strength of sterling could make it increasingly difficult to pass on significant price increases. Sterling has already appreciated by 10% against the euro so far this year and is now up by as much as 18%, compared with mid-March last year. Read more about the situation in France on the EBLEX website.
DOWNLOAD REPORT:- Download this report here