Static supply and weak demand was the summary of the trade given to me by one factory agent this week.
And while it is always tempting to interpret what factory spokesmen and buyers say as ‘ spin’, the demand side of the trade definitely looks weak. Weak for the majority of plants that is, but not for all.
The one bright light in the January gloom this week is Kildare Chilling who lift their price by 5c/kg for lamb to €4.60/kg plus quality bonus of 10c/kg.
This brings them into line with last week’s leader Kepak Athleague who remain on €4.65 plus quality bonus of 5c/kg. Both ICM plants and Moyvalley Meats stay on €4.60/kg.
Among the issues that are becoming a bit of a mantra for some factory bosses are carcase weights. Not a week has gone by that I do not hear about weights from some factory boss or other.
This week I was told that consideration is being given by ICM to reducing their weight limit from 22.5kgs to 22kgs because the temptation for farmers if the weather is good or lambs are thriving well is to let them thrive on.
However, from the factories’ point of view, they don’t really want heavier carcases as they pose problems when it comes to general market specifications, be they in supermarkets, hotels or restaurants.
This issue of what the consumer wants in relation to weights and specifications does emphasise the disconnect that tends to exist across all Irish farming where the primary producers do not associate the product we produce with the actual food on supermarket shelves or the culinary delights served up to us in our local restaurant.
Margins I would argue that he big processing interests don’t really want us to make that connection because if we did we might actually figure out how much these middlemen are making.
So when the factory man says the market is “flat” or “ difficult” it can mean that the only thing that has gone flat is their margin, because there always is a margin.
Both IFA and ICSA are reporting that the actual lamb price on the ground is in the €4.75-4.80/kg bracket, while ewes are trading from €2.50-2.70/kg off factory base prices of €240-2.45/kg.
It’s worth having a close look this week at the mart reports because the message there is that prices for sheep, particularly heavier sheep, was up last week.