Lamb prices plunge be­low the €5/kg mark

Irish Independent - Farming - - FRONT PAGE - Martin Cough­lan

FAC­TORY QUOTES for lamb have slumped un­der the €5/kg mark in some plants for the first time this year.

Farm­ers have seen 50c wiped off lamb quotes over the past fort­night — this equates to a €10/hd price cut on a 20kg car­cass.

Both ICM plants cut their quotes by 30c/kg over the week­end, leav­ing them on €4.90/kg - plus an ad­di­tional 10c/kg for qual­ity as­sured (QA) stock. Mean­while, Kepak Ath­league’s €5.05+15c/kg is 20c/kg less than last week.

Lamb prices had held up well un­til this point, with French im­ports of Ir­ish lamb up 4pc this year, and over­all sheep­meat ex­ports up by 3pc.

Un­der­pinned

Eid al-Adha, which came to an end yes­ter­day, had un­der­pinned the trade in re­cent weeks and Bord Bia has re­ported that de­mand for Ir­ish lamb was very high in the lead-up to the Mus­lim fes­ti­val.

IFA na­tional sheep chair­man Sean Den­nehy said a lot of lambs were sold over the last few weeks, with 74,535 sold in the past week alone. He said the lamb kill is run­ning 14pc ahead of last year or up 75,000. “This should mean sup­plies will be tighter in the com­ing weeks, and this should help steady the trade,” he said.

“I think farm­ers that have gone through their lambs and taken two or three pulls al­ready, have large num­bers moved, and they will want to see the trade set­tle be­fore they move again.”

Our sheep price ta­ble now in­cludes base quotes as re­ported by North­ern sheep plants yes­ter­day to the North’s Live­stock and Meat Com­mis­sion (LMC). Con­ver­sion from ster­ling to euro is €1 to 90p.

The two ICM plants slashed 30c/kg off their quote for lamb over the week­end, leav­ing them on €4.90+10c/kg QA, while Kepak Ath­league are down 20c to €5.05+15c/kg QA. Dawn Bal­ly­hau­nis and Kil­dare Chill­ing both de­clined to offer an of­fi­cial quote.

The LMC re­ported North­ern plants as quot­ing from €5.005.11/kg for lambs up to 21kg. So why would a North­ern pro­ducer bother trading with Southern plants when prices here are re­ally no bet­ter? Or put another way, how much do

Southern plants have to pay to tempt North­ern lamb south?

For cull ewes, the ICM plants raised their offer by 10c/kg to €2.60/kg, while Kepak dropped 15c/kg to €2.50/kg.

So where are we at? With this year’s sheep kill up over 92,000 on this time last year there is a feel­ing on the ground that de­spite fac­tory prices fall­ing, the lack of sheep in the sys­tem could help push prices higher over the next few months.

Kevin Murphy of En­nis­cor­thy

Mart said: “Ev­ery­one ex­pected prices to soften once the fac­to­ries fin­ished buying for Eid but with a lot of heavy sheep gone, if lads hold tough and squeeze sup­plies, who’s to say in two weeks’ prices won’t im­prove?”

With Kepak’s base 15c/kg above the two ICM plants, there ap­pears to some room for op­ti­mism. I asked a rep­re­sen­ta­tive of Kepak why they had in­creased the gap be­tween them­selves and ICM for lamb from 5c to 15c/kg. I was told the com­pany wants to “keep sup­plies com­ing”.

Another in­dus­try ob­server com­mented that while we’re all on the same road, “fac­to­ries ap­pear to have wan­dered off into a fog and got lost”.

And with two plants not quot­ing, some on the pro­ces­sor side seem in­tent on creat­ing a fog of doubt in farm­ers’ minds as to where the trade is at post-Eid.

Dra­mat­i­cally

The mart trade has slipped but re­mains rea­son­ably steady.

While prices have eased by 5-10/hd over the last fort­night, Patsy Smith of Dowra Mart reck­oned that most of that hit hap­pened two weeks ago.

“Prices here fell by around €5-8/hd a fort­night ago but last week the trade was far more sta­ble,” Patsy ex­plained.

Oth­ers in the marts sec­tor pointed out that the sheep trade is far from dead, since heavy lambs ap­pear to be scarce, while store lamb buy­ers have been very ac­tive.

De­pend­ing on how farm­ers now man­age sup­plies, there could still be a lot to play for.

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