Why recent lamb price cuts have back fired factories
NUMBERS are not materialising as expected in the factories.
The tactic of pulling the price dramatically over the last three weeks seems now to have backfired on the factories as farmers chose to leave their lambs in place rather than take a price in a falling market.
A bit like some Galway supporters who believed all they had to do to claim the Connacht title was turn up on the assumption that Roscommon would roll over, the factories have rediscovered that if you take things for granted, you pay for it when you get it wrong.
That ‘payment’ this week translates into prices that are up by anything from 5-25c/kg for spring lamb. That 25c/kg increase comes from Kepak Athleague who, with a price of €5.20+ bonus of 5c/kg last week, were guilty like Galway of assuming too much. This week they are forced to up their game for lamb by that 25c/kg to €5.45/kg plus their 5c/kg bonus.
Kildare Chilling, on the other hand, are a bit like the Cork hurlers who dispatched Clare: careful and consistent. Okay, they are up by 5c/kg to €5.40/kg plus bonus of 10c/kg, but at €5.35/kg — which was 15c/kg ahead of their main opposition last week — they were not taking the numbers issue for granted.
The two ICM plants equally lift their game by 10c/kg from last week to €5.30/kg plus 10c/kg bonus, while Dawn Ballyhaunis and Moyvalley Meats also come in at €5.30/kg for lamb.
The story from both the IFA and ICSA is the prices actually being paid for lamb are up around €5.60/kg, with the price for cull ewes about 30c/kg above official quotes at €3.00/kg
The issue of what is influencing numbers varies with who you talk to. Some men are saying that having sold the first of their heavy lambs they are waiting until the next draw are weaned and fit. Others maintain that supplies, while consistent to a point, are being marked by the fact that sellers are choosing to sell at possibly lighter weights, thus depriving factories of free product.