Farm Ireland

Friday 23 February 2018

Quotes way out of kilter with prices in real world


Joe Healy

I might be talking against myself here but the price table with this article is about as relevant or as useful a guide to lamb prices today as Dublin's last point was to the outcome of Sunday's Leinster hurling final.

I say this because those quotes bear no resemblance whatsoever to the actual prices that the processors are having to pay to secure adequate numbers.

OK, the spell of fine weather over the past week ensured that selling lambs was way down the list of priorities as farmers were more interested in making silage, spreading slurry and spraying crops than gathering sheep.

Allied to this, some sources were admitting that the domestic trade had improved considerably and this, combined with a rise of 10c/kg in France last week, as well as the onset of Ramadan next month, has all been positive from a sheep producer's point of view. Generally the factories always quote a bit lower than what they are actually willing and having to pay but the difference is normally a lot less than the obvious 20-30c/kg between the table here and the real world. While not giving all away, more than one factory source did agree that it was taking pretty close to €5/kg to tempt the farmer to sell.

Actually, the quotes are so ridiculously out of kilter that I'm not even going to discuss them apart from acknowledging that they show an improvement of 10c/kg in half of the plants. What I will say is that, if you are selling, it is imperative that you bargain hard on price and carcass weight. An extra half kilo and at least 30c/kg could mean an extra €9/lamb when compared to accepting what you may be quoted.

There are farmers gaining or losing this much as you are reading this where some are accepting 450c/kg plus 6c/kg to 21.5kg, while others are arguing for and getting 480-490c/kg to 22kg.


Commenting on the situation, the IFA's James Murphy said that the farmers are sending a very clear message to the factories that the present quotes are totally unrealistic. By holding out and refusing to sell at the low quoted figures, many of them are securing prices of between 480-495c/kg. He urged producers to ensure that they bargain for a price that will return at least €100/lamb after stoppages.

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The ICSA 's John Cleary hit out at the factory attempts early last week to further slash prices, saying that the quoted prices meant farmers were receiving almost 30pc less for their product than they were 10 weeks ago, while at the same time the retailer was receiving the same price for lamb.

The cull ewe trade remains very firm in a range of 250-270c/kg. Both ICM plants and Kildare Chilling are at the upper end of the scale.

An Bord Bia reported that the sheep trade continued to struggle in response to demand seasonally easing on both domestic and export markets, combined with supplies on the domestic market showing little signs of easing.

On a year to date basis, sheep supplies are now more than 2pc higher than the corresponding period last year.

In Britain, the spring lamb trade during the week weakened further coinciding with strong supplies, weak demand and some strengthening in sterling.

By the weekend live market prices stood at the equivalent of €5/kg, inclusive of VAT for new-season lambs.

In France, the market remains weak, partly reflecting excess supplies against lower demand levels as the holiday season takes hold.

Virtually all the increase in supplies is still being driven by Britain. Towards the end of the week Irish grade 1 spring lamb were reported to be making up to €5/kg.

Indo Farming