Exports and festival boost hopes for lamb prices
With increased n umbers of lambs coming forward for slaughter, there is downward pressure on prices – but a leading market analyst has this week suggested that sheepmeat exports and an important religious festival will help stabilise values.
In his view of the market, Stuart Ashworth, head of economic services at Quality Meat Scotland, points out that the latest UK trade data indicates “significant growth” in UK sheepmeat exports this year.
Part of the reason for this is the weak pound but exports have also been helped by European prime lamb prices holding up about 3- 4 per cent higher than last year.
Ash worth said :“Provision al figures show UK exports of sheep meat in the second quarter of 2017 have climbed by around 25 per cent, compared to last year.
“Non- EU exports, which are mostly lower value cuts, have also grown but only make up around 7 per cent of all exports.”
As a result of the change in trade patterns and domestic production the volume of sheepmeat on the UK market in the first half of 2017 fell around 7 per cent. Despite this, demand alone has not been strong enough to hold sheepmeat prices in the UK.
As for the international market, Ashwor th noted that New Zealand is again struggling to make full use of its tariff rate quota with the EU, with deliveries in the first half of 2017 down 21 per cent on the year.
“UK trade data shows deliveries of New Zealand lamb down 23 percent in the first half of 2017, although deliveries of fresh chilled product have seen a more modest decline of 17 per cent.
“Meanwhile, Beef and Lamb New Zealand [ their QMS equivalent] have released their estimates of the size of the current New Zealand breeding flock, showing a fall of 0.9 percent. Nevertheless, because of improved ewe and hogg condition, they are forecasting an increase of 1 per cent in their 2017- 18 lamb crop.”
On the home market, the latest QMS analysis shows that, despite auction throughput rising seasonally, the proportion of heavy prime lambs, over 45kg liveweight, in the supply chain is higher than last year.
“Analysts are waiting for results of the June census to give an indication of the size of the 2017 lamb crop, although the expectation remains that it will beat least as big as last year.”
The market can be sensitive to volume and Muslim festivals and the next Muslim festival is the end of the Hajj on 1 to 4 September.
“Last yearthis festival began on 10 September and in the week running up to it prime lamb prices saw a lift of 13p/ kg liveweight in the auctions,” he said.