Farm Ireland

Saturday 24 February 2018

Lamb quotes are steady as supplies remain tight

Joe Healy

The lamb quotes are almost as steady as the Munster defence was in the Magners League final last Saturday but that is as good as it gets. Anyone expecting a Barcelona-type performance from the lamb trade as we move towards the June bank holiday will not have learned from history.

Still, we should be grateful for small mercies, and farmers selling at roughly €6/kg are reasonably satisfied with the €120-129 price most lambs are returning, depending on price and carcass weights negotiated.

The Kepak plants take pride of place with an unchanged base quote of 590c/kg, plus the bonus. With its extra Quality Assured bonus on top of the normal top up, Kildare Chilling is offering a similar final figure to Kepak with its 585c/kg plus 6c/kg plus 5c/kg. Dawn Ballyhaunis is also offering this 585c/kg base, plus the 6c/kg, with Moyvalley on an all-in offer of 585c/kg. Both ICM plants are on 584c/kg plus 6c/kg.

Even though markets continue to be sluggish, factory sources are freely admitting that supplies of lamb remain tight, with adequate numbers proving difficult to secure. This is a point backed up by the IFA's sheep chairman James Murphy, who said that the small numbers on offer were resulting in factories paying €6/kg.

With the hoggets almost at an end, Kildare Chilling is the only plant offering a quote which is luke-warm enough at 450c/kg + 6c/kg + 5c/kg. Cull ewes are also under a bit of pressure.

Kepak Hacketstown has dropped its quote by 20c/kg but still shares top spot with Kildare at 280c/kg. Reductions elsewhere leaves the two ICMs on 270c/kg, with 260c/kg being offered by Dawn and Moyvalley.

The sheep trade eased further during the week, according to An Bord Bia, as the ongoing increase in spring-lamb supplies and a more sluggish market demand affected trade.

Quotes for spring lambs were generally in the €5.90-5.95/kg range, although more was reported to be available in some parts of the country. Despite cast ewe supplies remaining tight, the trade was hampered by stronger lamb supplies, with quotes typically falling by around 10c/kg to €2.80/kg.

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According to the CSO, total sheepmeat output for the first four months of the year is 3pc lower at 12,300t.

In Britain, the spring-lamb trade weakened as the week progressed. This coincided with stronger supplies of sheep. By the weekend, live market prices stood at the equivalent of €6.50/kg including VAT for new-season lambs.

In France, the market slowed as strong supplies from Britain, and a lesser extent Ireland, met with a sluggish demand. Towards the end of the week, prices for Irish grade 1 spring lambs were reported to be making €6.21-6.36/kg including VAT.

Meanwhile, the latest from the European sheepmeat forecast working group points to a slight easing in output for the EU-27 this year. In response to ongoing tighter availability of supplies, a slight recovery in sheepmeat imports is expected to materialise. However, this is largely dependent on New Zealand exports, which are running considerably lower to date.

Sheepmeat production in the EU-27 region is expected to fall by almost 1pc to 942,700t this year. Most of the fall in production is expected to occur in Spain, Romania and Greece.

Spanish sheep supplies are expected to fall by 3pc to 11.4m head, but the degree to which supplies fall will be largely driven by feed costs. Romanian supplies are forecast to drop by 5pc to 7.3m head, with a decline of 2pc forecast in Greece. A modest increase is anticipated in Britain and France.

EU-27 sheepmeat imports were 12pc lower at 239,000t last year. The EU Commission forecasts a slight recovery to 250,000t this year. However, New Zealand shipments to the EU for the first three months of this year were 18pc lower than a year earlier. This follows last year when New Zealand filled just 86pc of its quota.

EU exports of sheepmeat and live sheep are expected to drop by almost 13pc to 21,000t this year. However, the emergence of markets such as Turkey, Northern Africa and the Middle East will leave shipments well ahead of 2009 levels.

Indo Farming