Farm Ireland
Independent.ie

Wednesday 26 September 2018

Factories using 'extra ewes as lamb back up'

17/5/2018. Loughrea Sheep Mart
Photo Brian Farrell
17/5/2018. Loughrea Sheep Mart Photo Brian Farrell
Martin Coughlan

Martin Coughlan

The general consensus among factory buyers yesterday was that "numbers are coming away steadily". Unfortunately, quoted prices for lamb yesterday were not steady; this week's cut is from 10-20c/kg.

In short, the range of lamb prices yesterday ran from €5.60-5.80/kg. On the hogget side, Kildare Chilling are the last plant to continue to operate an official quote for hogget, €4.40+10c/kg quality assurance. Cull ewes actually showed some improvement yesterday with Dawn Ballyhaunis upping their offering by 10c/kg to €2.90/kg, while all other players stayed firm on last week's prices.

How should farmers read the trade? Does the fact that the cull ewe has remained so resilient indicate that the trade is fundamentally sound at a basic level? 

Does the fact that factories continue to give a relatively good price for ewes relative to last year's price - which at this time was €2.60-2.70/kg - only a means of keeping actual lamb prices under pressure?

I'm not privy to how factories make decisions in relation to market conditions versus supply, but the cull ewe supply versus the price of lamb is an interesting question.

John Brooks of ICSA reckons that factories are using the fact that after the hard spring and anecdotal evidence that there was a higher than normal mortality rate among newborn lambs, there are now a lot more cull ewes in the system. "Factories are using these extra ewes as a back up to actual lamb," the ICSA man said.

Mr Brooks also told me that newborn lamb mortality figures in the UK this spring were 30pc higher than the norm. "Anecdotal evidence would indicate that lamb mortality was also higher here this spring than normal. Thus the number of lambs has to be less, but the number of cull ewes more," he said.

Bord Bia figures seem to support this argument. In the year to June 16, lamb supplies to the factories are back 31,711 while the supply of cast ewes and rams is up 36,218 versus the same period for 2017.

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Moving back to our price table, yesterday's best quote for lamb came from Moyvalley Meats at €5.80/kg which is back 10c/kg from their quote this day last week.

In second place, and having dropped 20c/kg are Kildare Chilling on €5.70+10c/kg quality bonus. Next up are Kepak Athleague on €5.70 and also back 20c/kg.

The two ICM plants are at €5.60 plus 10c/kg quality assurance, followed by Dawn Ballyhaunis on a straight €5.60/kg - all three plants dropping 20c/kg off last week.

On the ground, prices for cull ewes range from €3.00-3.30/kg to between €5.70-5.90/kg for lamb. What you do with that piece of information if you're a processor may decide how viable new potential supermarket orders might be.

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