Farm Ireland

Saturday 24 February 2018

Northern lamb prices up €10/head on last year due to weak Sterling

Ciaran Moran

Ciaran Moran

Lamb prices in Northern Ireland are currently running in the region of €10 ahead of last year, according to latest figures from the LMC in Northern Ireland (NI).

It says quotes from the major processors this week for R3 grade hoggets were in the region of 375p/kg (430c/kg)with plants paying up to 22kg.

This is a notable increase from the corresponding week in 2016 when the quotes from the plants were in the region of 340p/kg (390c/kg) up to 22kg.

Meanwhile, the price reported R3 grade lamb price in the week ending  January 1, 2017 was 373.1p/kg (430c/kg), up from 334.1p/kg paid during the corresponding week in 2015/2016.

This increase by 39p/kg accounts for a £8.58 (€10) head increase in the value of a 22kg lamb year on year.

According to the LMC, much of this increase in deadweight lamb prices can be attributed to a weakening in the value of sterling against the euro.

It says in the week ending 01 January 2017 the R3 lamb price was the equivalent of €4.37/kg while in the week ending 02 January 2016 the R3 lamb price was the equivalent of €4.53/kg.

Therefore in euro terms NI lambs were actually worth 16c/kg less in the week ending 01 January 2017 than they were in the corresponding week last year.

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The euro/sterling exchange rate affects the NI deadweight lamb trade in two ways, the LMC has said.

Firstly a weaker sterling makes NI origin lambs more attractive to processors in ROI and thereby increases demand for NI origin lambs for export to the Republic plants for direct slaughter.

This increase in competition for lambs usually results in an improvement in the deadweight trade due to shifts in the supply and demand balance.

In addition to this the LMC says a weaker sterling also benefits the local sheep sector by making it easier for NI processors to secure markets for NI origin lambs on the valuable EU market.

It says a weaker sterling makes NI lamb more cost competitive and therefore easier to market than lamb from other EU regions, in particular ROI origin lamb.

However, the LMC has warned that with ROI acting as such a valuable outletfor the NI sheep sector in the form of lambs for direct slaughter and the EU as a whole being such a valuable market for NI lamb products it is important that every effort is made to maintain these valuable market outlets following the decision of the UK to leave the EU.

Online Editors