Quotes static but market may be about to turn
THE US election race is a bit like this week’s official factory sheep quotes – there’s only a hare’s breath between them.
Voters and factory bosses have a lot in common. Voters often say one thing before doing another in the polling booth.
Our sheep factories claim that lamb quotes remain unchanged from last week’s €4.304.40/kg, with Moyvalley still being the exception to the rule at €4.50/kg, all in.
Meanwhile, both the IFA and ICSA say that prices from €4.60-4.65/kg were negotiated last week and that some of those prices were carried over into yesterday. On the ground the feeling is that as the week goes on there maybe more bite to the trade.
Indeed looking at mart reports as they came in towards the end of last week it was noticeable that sheep prices were generally hardening, with lamb up by €2-3/hd in places.
It’s always tricky to try to second-guess the market, but with factories not forcing prices down yesterday, you would be tempted to say we’ve gone through the bottom of the cycle on prices and a slow but steady upward movement can be expected from here to the end of the year.
The humble ewe also remains static with quotes around €2.20-2.30/kg, while prices negotiated reputed to be closer to €2.50/kg.
Statistics produced by the British Agriculture and Horticulture Development Board (AHDB) on sheep numbers in the UK for late 2016 and predictions for 2017 make interesting reading from an Irish perspective.
Firstly, the numbers of sheep slaughtered in Britain in the final quarter of 2016 is expected to be up 4pc on the previous year, yet overall sheep meat production for 2016 is expected to be down 3pc.
Production in 2017 is expected to rise by just 2pc, leaving levels still below those of 2015, but it is effect of a weakened sterling in 2017 that is of most interest.
Sheep farmers in the UK could very well see an increase in farm gate prices as weaker sterling keeps New Zealand imports at bay while at the same time making British lamb more attractive on the Continent.
From an Irish perspective, we will be battling the same currency challenges as the Kiwis, while at the same time trying to protect our French market share from that discounted British lamb.
On a separate yet relevant issue one factory man made a very interesting point to me yesterday morning. “When I started lamb was the poor relation of beef - it was 15-20pc less in price. Today it’s about 20pc above the cattle price - that’s a 35-40pc turn around.”