Farm Ireland

Sunday 25 February 2018

Fears are realised as quotes tumble ¤10/lamb in week


Joe Healy

Sheep farmers I spoke to at the All-Ireland Sheep Shearing Championships in Kilkenny on Sunday were well pleased with the lamb trade so far this year -- but they were also hoping that this week, following the bank holiday, would break with the tradition of significant quote and price drops.

I'm sorry to be the bearer of bad news but their worst fears are being realised to some extent as quotes have dipped significantly across the board.

A base of 540c/kg plus the bonus appears to be the quote in all the plants. This represents a fall of 45-50c/kg or €10/lamb since last Tuesday.

This is extremely disappointing given that supplies, while relatively strong, are not flooding the place and the domestic trade remains pretty strong. Farmers would be forgiven for thinking processors are making the most of the traditionally negative relationship between lamb prices and the June bank holiday weekend.

As you will see from the table, the aforementioned base quote is the same everywhere, apart from Moyvalley Meats where no quote was available.

The most striking aspect about the rest quoting the same figure is that it is the first time this year that all of the plants are singing off the same hymn sheet. Whether it makes any overall difference or not is debatable, but I always like to see some variation between the factories.

I just feel it gives producers more scope for bargaining before they sell. However, it is still imperative that bargaining on price and carcass weight is done as prices well above the quotes are being paid.

The quality assurance bonus on top of the normal bonus leaves Kildare at the top at 551c/kg when all is added up. This equates to €115.71 on 21kg. There is €2.75/lamb to be gained if you get a half kilogramme more and then work on upping the quote.

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The IFA's James Murphy said that there was strong anger, resistance and surprise among sheep farmers at the concerted effort to pull prices.

He added that some sellers were negotiating prices of up to 570c/kg for their lambs.

Kildare Chilling is the only plant quoting for hoggets, with an offer of 420c/kg plus 6c/kg plus 5c/kg. Plants quoting for cull ewes are mainly on the same 270c/kg, with Dawn Ballyhaunis lagging behind at 260c/kg.

Bord Bia reported that the sheep trade eased as the past week progressed as the ongoing increase in spring lamb supplies along with a slowdown in market demand continued to affect trade.

Quotes for spring lambs were generally making €5.90/kg at the beginning of the week, before settling down to €5.60/kg by the end of the week. Despite cast ewe supplies remaining tight, the trade continues to be affected by stronger lamb supplies with quotes typically falling by around 10-30c to around €2.50-2.70/kg.

In the UK, the spring lamb trade also weakened as the week progressed, coinciding with stronger supplies of sheep and some weakening in sterling.

By the weekend, live market prices stood at the equivalent of €5.91/kg for new season lambs.

In France, the market slowed as domestic supplies were being marketed earlier than usual due to drought conditions.

This, combined with increased supplies from the UK and to a lesser extent Ireland, continues to exceed demand levels.

Towards the end of the week, prices for Irish grade one spring lamb were reported to be up to €6.10/kg including VAT.

Indo Farming