Are the factories toying with farmers to flush out supplies?

Factory quotes for sheep, be they spring lambs, hoggets or cull ewes, were back by between 10-20c/ kg yesterday.

“Normal service has been resumed,” was the reaction from one sheep farmer I know, but given that Ramadan began last Thursday a price pull was always going to be on the cards.

Comparing current quotes with those from this time last year, farmers with factory sheep are still in better place than 2019.

Hoggets were being quoted yesterday at €5.90-6.00/ kg compared to the €5.005.40/kg at the end of April 2019. And spring lambs are currently on €6.30-6.40/kg to €6.00-6.40/kg last year. However, cull ewes at €2.502.70/kg yesterday are down on the €2.70-2.90/kg quoted in April 2019.

A number of agents and factory officers told me that while supplies are “not overly plentiful” they are “still coming”.

One added that trade to Europe would be slow this week due to Friday, May 1 being a bank holiday across the EU.

And as trade in the various markets got underway yesterday his fears appeared founded.

Cheap British sheep products were being unloaded and buyers began to review their price options. Other potential disruptions to the trade remain in the wings, with one factory at least thought to be reviewing its Covid 19 health measures with a view to tightening them even further.

Sean McNamara of ICSA believes the factories are toying with farmers. “They’re playing cat and mouse with the price in the hope they can flush out supplies,” he maintained.

Leaving aside the shortlived collapse at the end of last month, the sheep trade traditionally moves up and down in fairly predictable cycles.

Kepak Athleague Kildare Chilling

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A more immediate concern going forward, however, will be the continuing effect of the various measures introduced across Europe to combat Covid-19.

Should the social distancing measures still be in place in the run up to the end of Ramadan on May 28, we may not see the traditional lift in demand that comes at that time.

Returning to the present, and the shape of this week’s price table, the most noticeable thing is that both Kepak Athleague and Dawn Ballyhaunis chose not to quote as they possibly wait to see how supplies and market demand plays out as the week progresses.

Whatever the reason, they are not on the table meaning that Kildare Chilling, despite being back 20c/ kg at €6.40+10c/kg quality assurance for spring lambs, remain 10c/kg clear of the 270+10QA 590+10QA 600+10QA 630+10QA* 640+10QA two ICM plants – both of whom are unchanged from last week at €6.30+10c/kg QA being quoted for yesterday, but this price was under review as we went to press.

Northern Ireland imports

All three drop their quote for hogget by 10c/kg, with Kildare quoting €6.00+10c/ kg QA as against the ICM offering of €5.90+10c/kg QA*. Quotes for cull ewes fall 20c/kg across all three factories with the two ICMs on €2.50/kg (again that quote was for yesterday and is unde rreview) and Kildare registering €2.70+10c/kg QA.

Bord Bia figures show supplies of sheep coming into the Republic for direct slaughter from Northern Ireland in the first three months of this year totalled 98,000 compared to 97,000 for the same period in 2019.

However, the Livestock and Marketing Commission of Northern Ireland reported that the number of lambs/ hoggets exported to the South were back over 900hd to 3,465hd for the week ending April 18 against 4,589 for corresponding week in 2019.

On the up:

Hoggets were being quoted yesterday at €5.906.00/kg compared to the €5.00-5.40/ kg at the end of April 2019.