Mild winter weather has let the factories off the hook on prices

IF we as farming people were to assess a year in just purely monetary terms, the sheep business for 2016 would look poor compared to the previous year.

Go back to the first quarter of 2015 and you see factory lamb prices increasing to and beyond €6.00/kg. By the first quarter of 2016 prices were down by a euro and by the end of 2016 were another 50c/kg lower.

That’s a 25pc fall in real terms in price from January 2015 to this week.

And while I do have plants quoting more in the league table today (see below) one of our bigger operators is on €4.50/kg this morning.

The reason for the falling price can be partly seen in the Bord Bia statistics (opposite) that show the fluctuations in overall sheep and lamb numbers between 2015 and 2016.

With overall numbers at just over 500,000 in early 2015, prices were heading for €6 plus, but once numbers began to rise the price slide was on.

Numbers hit 800,000hd in the third quarter of 2015 and once a price slide starts it can be very hard to halt.

If it was, once numbers settled back down as they did in the first quarter of 2016 overall average prices in theory should have gone back up to the €6.00/kg region, but they didn’t.

Granted the top end lambs pushed €5.80-5.90/kg in February, but the overall average according to Bord Bia stayed fairly flat at about €5.20/kg.

Viability

As the year progressed, prices fell further with factories using increasing supplies to dampen price expectations to their current levels.

However, the viability of sheep farming, no different to all farming, cannot be measured in just purely monetary terms, which is why so many of us stay at it.

There would have been far more hue and cry towards the end of last year in the sheep section if the weather had not taken up so very well.

Remember the early part of the spring had seen very unfavourable conditions with wet and cold making the actually physical job of fattening sheep difficult on both stock and shepherd

As the year progressed the mart trade – with great assistance from the live trade and from store buyers – went from flat to very buoyant which helped circulate more money through the system.

As the year ended those store men who had invested heavily found that the months of November and December were not overly bad from a weather point of view.

As I write this column, the weather continues dry and on occasion very sunny.

And that’s part of the issue in farming – once we can get to do our job well, we tend to lose sight of the fact that we may not be getting all that well paid for it.