Ringside: Lamb prices on the verge of collapse
FARM leaders are again questioning the commitment of sheep processors to the sector.
"A couple years ago the processors launched their campaign for putting a million extra ewes into the system," says John Brooks of the ICSA.
"Fine words were spoken; much was said about the improving image of sheep meat and expanding into new markets. Yet here we are not 18 months later and the factories have collapsed the price because they can't handle a couple of thousand extra sheep."
And collapse is about where we're at with prices for this week back another 30-40c/kg for lamb, while cull ewes slip 10c/kg. Back in the middle of April Moyvalley was quoting €7.10/kg for lamb and everyone else was around the €6.80-6.90/kg mark. Today those prices have slipped to a uniform €4.90/kg, with Moyvalley not quoting.
That's a €2.00/kg drop, which on a 21.5kg carcase is €43/hd of a fall in three months. I'm not sure I could handle that amount of volatility in my income if I was solely dependent on our little woolly friends for a livelihood.
"Snap!" was the reply from one factory agent I was speaking with yesterday as he realised his price for lamb was exactly in line with all the opposition. The reasons given by factory representatives for this barrage of price cuts range from an over-supply in the UK to the hot weather reducing demand for roasts.
This week's price table for cull ewes also has a uniform appearance, with Dawn Ballyhaunis, the two ICM plants and Kepak Athleague all on €2.70/kg - uniformly down 10c/kg from last week. Kildare Chilling offer more with their quote of €2.80+10c/kg quality assurance, but that base price is also 10c/kg less than last week.
IFA sheep chairman Sean Dennehy said after meeting the main factories last week that "prices need to stabilise at this stage".