New Year's cheer for sheep farmers as prices hit €5.40/kg
2020 has started brightly enough for sheep farmers as tightening supplies continue to push factory and mart prices higher.
For my last report on December 17 factory quotes for lamb ranged from €4.85-5.00/hd. Yesterday lamb quotes were 10-20c/kg better at €4.95-5.20/kg. The cull ewe trade to the middle of December saw quotes more or less stuck around the €2.70/kg mark. Today Dawn Ballyhaunis and the two ICM plants have pushed their quotes on to €2.80/kg, leaving both Kepak Athleague and Kildare Chilling behind at €2.70/kg.
Returning to the lambs, yesterday's quotes breakdown is as follows: Kildare Chilling continue their table topping run as they offer €5.20+10c/kg quality assurance (QA). Next up are Moyvalley Meats on €5.20/kg, with Dawn Ballyhaunis on €5.00+10c/kg QA, while the two ICM plants appear off the pace at €4.95+10c/kg QA.
How do these quotes translate when you actually have stock to sell? Word from both the IFA and ICSA is that lamb prices now range from €5.30-5.40/kg, with cull ewes actively making from €3.00-3.10/kg.
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Things have also moved positively in relation to weights with most plants now paying up to 23kgs, although a number still lag behind at 22.5/kg. Be sure to ask about the weights and clipping in advance, we all tend to get a bit blinded by good prices.
IFA sheep chair Sean Dennehy was busy over the Christmas period. While the rest of us were collapsed on the couch stuffed with turkey and ham, Sean was going over Bord Bia sheep statistics.
"According to Bord Bia data for mid-December, Irish lamb prices were €1.96/kg behind French prices, 96c/kg behind Spanish prices and 44c/kg back on New Zealand prices," the IFA man said. Furthermore, his analysis showed that the UK lamb price closed out the year at the equivalent of €5.40/kg including VAT.
Analysing the 2019 kill, Sean noted the total kill at 2,987,534 was back 204,873hd on 2018. The reduction arose from a fall of 90,879 in the hogget kill early in the year and a 97,583 reduction in the ewe kill. He said the mid-season lamb figure was back only 17,865hd.
He is positive about the early part of 2020, with China helping to drive demand and supplies in Britain only adequate to supply their own market.
Early signs from the marts indicate that prices continue to harden with various sources quoting improvements of €5-8/hd across stores and heavy sheep.
Jim Bush of New Ross Mart told me after his sale yesterday that we are beginning to see some positive results from all the uncertainty that surrounded Brexit in 2019
"An awful lot of Scottish and English sheep were got rid of back in the autumn ahead of that Brexit deadline in October so there's a big loss to the factories now," he said. Looking at the practicalities over the next few months
But he added that those buying stores now need the price to rise further. "January and February are two expensive months when you feed meal. It's an additional but necessary cost but one that needs to be covered."
Meanwhile, I was in a clothes shop in Waterford city recently where the assistant directed me to a display of round-neck jumpers.
"Reduced by €30," she smiled "Then came the clincher: "Ours are designer and they are all lamb's wool. You won't buy lamb's wool for less," I was told. It was a similar story next door where so-called "designer" lamb's wool jumpers sold from €80-€140. Staff in a more mainstream retailer told me lamb's wool was outside their price range, hence they didn't stock it.
What struck me is that while the designer's logo adds exclusivity in the minds of those purchasing, the sales staff were focused on the wool.
I imagined a well-heeled executive driving through the Irish countryside with his €80-€140 lamb's wool jumper as he passed a field of grazing sheep.
Comfortable and warm, he passes on believing his money has helped the farming community while at the same time bonding him closer to nature and the planet.
What he doesn't know is that wool to an Irish sheep farmer is typically worth only 50c/kg.
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