AHDB Cattle and Sheep Weekly
27 March 2015
Has the fine balance in the lamb trade tipped?
As Easter approached, despite prices tracking just below last year’s position, the lamb trade has held up relatively well, given the number of lambs available. While it appears that demand has been underpinning trade to some extent, with procurement for Easter ending, the market remains very finely balanced. As old season lambs have come forward in higher numbers, there has been some downwards pressure on price at GB auction marts in the latest week. In week ended 25 March, at 197.2p/kg the GB OSL SQQ dropped over 3p on the week. Notably, trade on Wednesday 25 was back around 10p on the week and indications for Thursday 26 suggest a similar week on week fall. Despite this pressure on the lamb trade, the cull ewe market maintained its positivity as the reduced numbers forward continue to have an impact. At £86 per head, the average was up £2 on the week to be £13 ahead of year earlier levels.
Short term, there is some potential to mitigate the downwards pressure on lamb prices. A significant proportion of the lambs carried over into this year have now gone through the system. In the first two months of the year, almost 165,000 extra lambs were processed. It is reasonable to assume that many of the remainder will have been marketed in March, especially with an earlier Easter this year. Consequently, if the expected increased supplies from New Zealand hit the market as the old season trade tails off and before the new season trade establishes itself, its effect ought to be less damaging.
Higher lamb slaughter continues in February
At 890,000 head, UK lamb slaughterings in February were 11%, or 88,000 head, up on the year. This represents the eleventh consecutive month in which throughputs have been higher year on year. Since June, lamb slaughterings are now up almost 550,000 head on the same period in 2013/14. Notably, the uplift was entirely as a result of an increase in throughputs in Great Britain as, for another month, throughputs in Northern Ireland were lower than a year earlier. With the reduced impetus to reduce breeding flocks continuing, UK adult sheep slaughterings in February were again lower on the year, being back 21% at 114,400 head.
Clean sheep carcase weights were well above seasonal norms last year. This development has continued so far in 2015 on the back of high forage availability and relatively low prices for bought-in feed. Combined with the increased lamb throughputs, this offset the lower adult kill and sheep meat production was up 6% on the year at 20,800 tonnes.
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