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AHDB Cattle and Sheep Weekly

26 May 2015

EBLEX Cattle and Sheep Weekly - 26 May 2015EBLEX Cattle and Sheep Weekly - 26 May 2015

Lamb prices fall as numbers increase

After a brief period of stability, lamb prices at GB auction marts have started to come under pressure again. In week ended 20 May the OSL SQQ came back 11p on the previous week, to 167.9p/kg. Throughputs were down almost 15% on the previous week, as expected at this time of year, with fewer old season lambs left on farm and the seasonal switchover occurs. The new season trade has established itself this week and in the latest daily trading, prices have come under growing pressure as significantly increased numbers of spring lambs enter the market. For the week ended 20 May as a whole, the NSL SQQ averaged 194.1p/kg, back 16p on the week earlier. However, on Tuesday 19 May, with throughputs up one third, the SQQ was back 20p on the week to 189.1p/kg. On Wednesday 20 May the week-on-week drop amounted to 26p/kg, as the NSL SQQ came back to 182.2p/kg.

With the anticipation of another large lamb crop, it is possible that the market will remain under some pressure in the medium term. How demand fares amid these higher supplies will be critical to the evolution of farmgate prices. On the export side, the weak euro means that returns in sterling terms will probably be lower. However, imported supplies are likely to have already started to slow down. After heavy drought-induced production around the turn of the year, New Zealand is likely to be getting short of lambs. Its exports to the UK in March, which will have reached the market in April, were down 4% year on year.

Lower lamb slaughterings in April

At 1.06 million head, UK lamb slaughterings in April were 4% down on levels seen a year earlier. This represents the first time since March last year that monthly throughputs have been lower year on year. Somewhat unexpectedly, much of the decline appears to be in England and Wales, although data for Scotland has not been updated by DEFRA. Throughputs in Northern Ireland continued to be well ahead of year earlier levels. For another month it looks like there continues to be little drive to reduce the size of breeding flocks, despite strong prices still being achieved in the market for cull ewes. At 143,200, head adult sheep throughputs were back 10% on the year. However, this may be revised upwards once data for Scotland is confirmed.

For the first time since May last year, the average weight of clean sheep carcases in April was lower year on year, at 20.2kg. Adult carcase weights were also back on the year at 27.6kg. This, together with the fall in both lamb and adult sheep slaughterings, meant that sheep meat production was back 6%, compared with April 2014 at 25,300 tonnes.

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