High demand keeps prices on the rise
THE situation in the factory sheep trade is that numbers are strong but demand is just that little bit stronger.
Reports over the weekend indicated that nearly all sheep plants have returned to killing five days, and that as far as price was concerned €5.00/kg for lamb appears to be the current high water mark. The IFA’s John Lynskey claims €5.10/kg is possible once you added back bonuses in some circumstances.
As regards numbers, Bord Bia said throughput for the week ending November 18 was 65,000 head, which is 2,000 down on the previous week but 7,000 stronger than the same week in 2016. In short, numbers for this time of year are ahead of 2016 but so is the price.
In relation to price, all the main players pushed their official quote for lamb up by 5c/kg yesterday, with only Kepak Athleague remaining entrenched at last week’s price.
While they haven’t moved off of last week’s price of €4.85+5c/ kg bonus, Kepak remain ahead of the two ICMs and Dawn Ballyhaunis by a full 10c/kg before you add back in the various bonuses on the table below, and this despite all three plants pushing their own base quotes up by 5c/kg to €4.75/kg.
Kildare Chilling, who were second on the table last week, this week nip ahead of Kepak and into first place with their quote of €4.85+10c/kg bonus.
Moyvalley Meats quoted €4.90/kg yesterday, keeping them well in the mix.
Official quotes for cull ewes see Kepak move to an all-in price of €2.70/kg this week as opposed to their quote for last week of €2.55+5c/kg quality bonus. Kildare also move up, adding 10c/kg to their cull ewe price at €2.70+10c/kg bonus.
Dawn Ballyhaunis and the two ICMs remain unchanged on a straight price of €2.60/kg, while prices on the ground are reported to be in the region of €2.70-2.80, with John Brooks of ICSA willing to push the boat on the price of cull ewes out to €2.90-3.00/kg.
Speaking to factory representatives, all claim on one hand things are a bit “sticky” as numbers continue strong, yet they equally all concede that the market can take the numbers.
From a neutral observer’s point of view, once the factories push up their prices, the signal has to be that demand is rising despite those increased year on year throughput figures mentioned above.
The reality is, if the returns were not there to be had at the processing end, the first thing that would happen is the farmer’s price would get squeezed.
With the Christmas trade around the corner we will soon see if those extra numbers that have been coming through the system all year continue, and if they do will current demand offset any negative effect on pricing?