Farm Ireland

Sunday 17 December 2017

Drop in demand fuels shock fall of €10/lamb

Joe Healy

Lamb quotes have been smothered beneath a pile of volcanic ash.

A drop of 50c/kg (€10/lamb) has occurred since this day last week. This reduction was as fast as it was severe. My positivity of last Tuesday has been well and truly dampened.

I appreciate it is of little consolation to farmers with lambs to sell but we are still well ahead of the quotes of this week last year. However, this winter and spring have been extremely expensive and anything below the current quote of base 550c/kg is just not viable for the producer.

All the plants quoting are on the same 550c/kg plus the bonus. Moyvalley are not quoting as they will not be killing sheep until Wednesday.

Supplies are not overly plentiful but factory men are saying that there is, as yet, no great demand out there for the new season lamb and current numbers are more than adequate.

IFA's James Murphy has accused the factories of concerted moves to pull lamb prices. He said those moves were not justified by the market returns at the moment and that farmers were strongly resisting them and holding out for prices of 560-580c/kg.

The hoggets are steady, with an odd plant pulling quotes by 10c/kg. The two Kepaks are tops with their retained quote of 490c/kg plus the bonus. The two ICMs, Dawn Ballyhaunis and Kildare Chilling are on a base quote of 480c/kg plus 6c/kg.

Quality of supplies is coming to be a bit of an issue with some very plain and under-finished stock being offered. No one wins when this is happening. A few bags of meal could prove to be money well spent. However, there is a need to bargain here as I am aware of farmers getting between 500-510c/kg up to 23kg.

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Quotes for the cull ewes range from 270c/kg from Kildare down to the 250c/kg on offer from Kepak Athleague and the two ICM plants. Kepak Hacketstown is on 260c/kg.

Strong spring lamb supplies had some impact on prices this week, according to Bord Bia, although the hogget and cull ewe trade stayed firm as disposals remain limited.

Quotes for hoggets at export meat plants were stable at 490c/kg. In terms of spring lamb, the quotes for slightly stronger volumes were generally 570c/kg to 580c/kg for much of the week. The cull ewe trade was firm with quotes ranging from 250-270c/kg with the trade driven by the strong manufacturing demand for mutton.

For the week-ending April 10, total sheep supplies at export meat plants were back 18,400hd on the corresponding week in 2009 at 24,500 head. On a year-to-date basis supplies are running 14pc, or 76,000, head lower.

In the UK, the live market trade eased slightly due to increased supplies and weaker demand following the Easter festivities. By the end of the week, the average new season SQQ price stood at the equivalent of 610c/kg including VAT in England and Wales.

In France, the lamb trade eased in response to stronger UK supplies and an anticipated fall in demand as school holidays approach. The limited volumes of Irish spring lamb on the market were generally making 642c/kg for Grade 1 carcasses delivered to Paris.

At its annual outlook conference last week, Eblex projected lower UK sheepmeat output for 2010. The drop in production reflects the continued decline in ewe numbers across the region.

Irish Independent