Lamb prices on slide as no-deal Brexit looms
With little more than two months to go until the Brexit break point of 31 October, sheep farmers are already looking at prices well below last year’s levels.
According to Stuart Ashworth of Quality Meat Scotland, the fall in value was down to the increased supply of lambs which has acted as brake on prime sheep prices over the past couple of months
The UK is not alone in seeing sheep meat prices well below last year’s levels as prices in early August were more than 5 per cent lower than last year in Germany, Spain, France and the Netherlands.
“The UK price in euros was nearly 9 per cent lower,” said Ashworth, who added there was now some indication that prices were stabilising.
Slaughter data in June and July showed nearly 5 per cent more lambs went through abbatoirs and carcase weights were higher when compared with last year.
“This has significantly increased the volume of domestic sheepmeat available,” Ashworth added.
Looking at the market, he commented: “The importance of Muslim festivals continues to be illustrated by the lift in prices, despite good marketings, in the run up to the Eid al Adha only to dip away again in the following week.”
Coming up to date, he believed there had been some modest firming in the markets to bring them to similar levels to last year.
The weakness of sterling as a no-deal Brexit looks increasingly likely has also helped firm the market.
“Over the past month, the sterling exchange rate with the euro has gone from around 89p to one euro in Mid-july to 92p per euro in mid-august and has been weaker than a year ago since late May. Thus, currently an unchanged euro price would realise just over 3 per cent more sterling value.”
The lack of interest from New Zealand in the European market has also helped the UK increase its exports of sheepmeat to Europe over the past quarter with strong growth to Germany but also increased deliveries to France, Belgium and the Netherlands.
The home market has also shown some growth in the volume of fresh and chilled lamb compared to last year. According to Ashworth, this may be associated with the different weather conditions this year, although there has been some reduction in retail prices.
However the cloud of uncertainty over Brexit saw him end with a caution: “Despite the growth in exports and, in comparison to last year, a modest increase in retail sales providing some short-term positivity, which has perhaps helped support short keep store lamb prices at early sales, the uncertainty over terms of trade in November remains as a dark cloud on the horizon.”