Farm Ireland
Independent.ie

Wednesday 18 October 2017

Returns hit as factory quotes for lamb dip under €5/kg

Joe Healy

Great expectations. While Italy's were well and truly dashed in the final on Sunday night, the table attached will also dampen the expectations of sheep farmers, especially those who listened to the positive outlook presented at the marketing seminar last Saturday at Sheep 2012.

While they may have been talking more long term, for the average farmer the future is the next batch of lambs to be sold.

Unfortunately, today is the first time in a month that all plants are quoting less than the €5/kg threshold. However, the quotes are still much better than the 480-485c/kg being offered four weeks ago.

One young full-time sheep farmer told me on Saturday that his "line in the sand" was a minimum of €100/hd and he didn't care if this was achieved by selling at €5/kg to 20kg or €4.80 to 21kg.

Readers of this column will have often been reminded of the need to bargain on carcase weight as much as price/kg. An extra half kg is worth between 11-12c/kg at current prices.

Farmers do, however, need to concentrate more on what the markets require and sell at, or reasonably close to, the weights suitable.

Kepak's Jonathan Forbes said that in the January to May period this year 38pc of their lambs and hoggets were over-weight with carcases of more than 23kg too heavy for their retail customers.

During the same period 30pc were either too fat or too thin, with 16pc failing on both carcase weight and fat score.

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bonus

Kildare lead the way on today's quotes with not only the highest base quote of 495c/kg but also an extra 5c/kg bonus for QA lambs on top of the 5c/kg bonus for the U grades. This base quote reflects a drop of 5c/kg since last Tuesday. Moyvalley are offering an all-in 495c/kg.

The rest of the factories are quoting 490c/kg plus the bonus for the Us. Those figures will continue to satisfy the young farmer referred to earlier but with the wet weather and consequent higher costs the margin for any further reductions are as good as gone.

The IFA's James Murphy said that farmers are getting 500c/kg to 21kg and are strongly resisting the price pressure from the factories as the poor weather keeps supplies tight.

The quotes for the ewes remain steady. The ICMs and Kildare are offering 230c/kg. Kepak Hacketstown are on 225c/kg, while Athleague and Dawn Ballyhaunis are on 220c/kg. Moyvalley are not quoting for the ewes.

The trade in Britain was affected by lower demand from the French market combined with some increase in supplies being evident, Bord Bia reported.

By the weekend, new season lambs at live markets across Britain were making the equivalent of €5.47/kg including VAT.

competitively

In France, some increase in the levels of competitively priced Spanish and Portuguese lambs on the market have undermined demand for British and Irish product.

Prices for Irish grade 1 spring lamb were making up to €5.58/kg including VAT by the end of the week.

However, market demand may be helped over the coming weeks as the season for French lacaune lambs comes to an end.

Meanwhile, EU sheepmeat imports fell during the first quarter of 2012 due to falling NZ output coupled with some slowdown in consumer demand in response to the persisting European debt crisis.

The EU imported 17pc less sheep meat during the quarter compared to the same period a year earlier.

March shipments were down 10pc despite an earlier Easter in 2012. Shipments from New Zealand were back by 15pc to 37,400t, reflecting tighter domestic supplies with lamb production running 3pc lower at 243,000t for the first seven months of the 2011/12 marketing season up to the end of April.

While overall volumes have fallen, imports of chilled sheepmeat were up 6pc to 18,000 tonnes. Shipments were up from most suppliers with New Zealand accounting for nearly 90pc of total supplies.

However, this was still almost a third below 2010 levels. Frozen shipments fell by 29pc on the year to 24,000t with shipments from most regions significantly down.

Indo Farming