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AHDB Cattle and Sheep Weekly

13 March 2015

EBLEX Cattle and Sheep Weekly - 13 March 2015EBLEX Cattle and Sheep Weekly - 13 March 2015

Lamb prices move up again

In week ended 11 March the liveweight lamb trade at GB auction marts remained firm. The OSL SQQ edged up another 3p on the week to average 197.9p/kg, broadly level with the corresponding week last year. This takes trade to its highest point so far this year. This comes despite supplies seeming to remain plentiful, with throughputs 15% ahead on the week. As such, it appears that steady demand has continued to underpin trade once again as Easter creeps ever closer. Despite the apparent positivity attributed to the start of Easter procurement, with only three weeks to go until Good Friday (2 April), the market remains finely balanced. If lambs come forward in higher numbers they could, to some extent, keep a lid on the degree of any upwards pressure on farmgate prices.

Deadweight prices in week ended 7 March were still following the evolution in the liveweight trade, with the overall GB OSL SQQ up 9p on the week to an eightmonth high of 437.4p/kg. Again, this is somewhat promising in light of a stronger exchange rate between sterling and the euro. However, in the fortnight prior to Easter last year the SQQ was around 490p/kg and demand will need to perform well if that price level is to be achieved this year.

Lamb sales fall back as Christmas promotions end

According to the latest data from Kantar Worldpanel, lamb purchases recorded the largest proportional fall in volume terms of all the red meats in the latest three month period, ending 1 February. Only a small increase in the average price prevented expenditure falling over the period. Notably, most of the decline in lamb purchases came in January, a time when beef was performing strongly on the back of increased sales of mince. With the exception of stewing cuts, which hold only a relatively small proportion of overall lamb sales, all categories recorded a drop in sales, compared with the corresponding period last year. Promotional activity for leg joints over the Christmas period supported volume sales in this category in December but monthly volumes have since dropped back to October levels as the Christmas promotions ended. While the hard discounters recorded little overall change in lamb sales, they performed relatively well in mince. Notably, in the three-month period, this segment of the retail environment sold more lamb mince than two of the big four retailers.

Problems on the Spanish sheep market

The Spanish sheep market continues to experience major problems, with both production and consumer demand falling. Developments in Spain have some implications for the United Kingdom. Much of the Spanish trade to the Mediterranean region consists of heavy lamb and so can compete with British lamb. Read more about developments on the Spanish lamb market on the EBLEX website.

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