Things get ugly as factories put the squeeze on
ICSA sheep chair John Brooks was in top form yesterday with some barbed comments directed at the processing sector as he discussed falling sheep prices.
“Ugly” was how he described the factories’ continued downward pressure of lamb prices as quotes yesterday morning fell by another 20-40c/kg.
IFA sheep committee chairman Sean Dennehy added: “Sheep factories are taking advantage of the difficulties on farm at the moment with farmers off-loading lambs to reduce demand for grass.”
He urged farmers “to strongly resist moves to push prices lower”.
The reality at the moment is that he who pays the piper calls the tune– and yesterday morning that tune slipped a few octaves lower.
The spread of quotes for lamb was from €5.20-5.30/kg as factory bosses continued to claim back ground lost to them on the price front earlier in the year.
The biggest offenders in this “ugly” price war this week are Kildare Chilling as they drop their quote for lamb by 40c/ kg to €5.20+10c/kg quality assurance.
Next worst are Kepak Athleague with their 30c/kg reduction leaving their lamb price on €5.20/kg. There is a rider to that €5.20; factory representatives informed me that that price was for “yesterday only”.
Also stating that prices quoted for lamb yesterday were for “yesterday only” were the ICM group, whose quote of €5.30/ kg + bonuses of 10c/kg is back 20c/kg on last week. Dawn Ballyhaunis also drop their quote by 20c/kg as well as dropping their 10c/kg bonus to sit on €5.20/kg for lamb
Factory quotes for ewes also slipped as factories sheared their prices by another 10-20c/ kg.
Kildare remain the top payer despite dropping their ewe quote by 10c/kg to €2.90+10c/ kg bonus. Kepak Athleague dropped by 20c/kg to €2.80/ kg after the Dawn and the two ICMs had also adjusted their ewe quotes downwards by 10c/kg.
Kildare Chilling continue to be the only processor that will officially quote for hoggets – €4.00+ 10c/kg quality assurance yesterday, a full 40c/ kg below last Monday’s offering.
One of the knock-on effects of the factories’ sustained attack on lamb prices is that combined with the drought, confidence in the sheep trade at the marts has taken a hit. It’s one thing for lambs prices to fall due to factory pressures, quite another when you hear reports that prices fell in some places because potential buyers are unwilling to commit to the trade in the middle of a drought.
It’s hard to blame them. One east coast store finisher told me: “Men want to buy but all we’ve got to give lambs are cinders. The after grass hasn’t come.”