Lamb market ’in quite a good place’ despite higher numbers coming to market
Despite some easing in prices last week, prime lamb producers have continued to benefit from a firm market.
The weaker pound has provided a boost, according to Stuart Ashworth, head of economic services at Quality Meat Scotland.
“Sterling is about 20 per cent weaker and prices are about 20 per cent higher, so there is definitely an exchange rate effect,” he said.
“The prime market may also give encouragement for store lamb sales and there are positive noises coming from there.”
The weaker pound has made UK lamb competitive in the European market despite the rise in sterling price, although exports have been lower than last year.
Lower availability of domestic lamb meat has also helped boost prices.
“While clearly running lower than last year in both the UK and Ireland, we do not know yet whether this reflects a smaller lamb crop or simply slow growth rates,” said Mr Ashworth.
The latter could result in a large volume of lamb during September and October.
Charles Sercombe, NFU livestock board chairman, suggested new export opportunities had also supported prices.
“With the refugees in Northern Europe there are essentially a million more people who are traditional eaters of lamb and lamb products.”
Mr Sercombe said the retail market for lamb was currently in ‘quite a good place’.
“Farmers’ margin is getting to about 50 per cent of retail price, when half a year ago we were in the low 40s.
“There is now enough margin for farmers and for retailers.”
Prices are currently about 25 per cent higher than this time last year, their highest level since 2013, but some of this has been offset by lighter carcases.
UK carcases were 0.4kg lighter and Scottish carcases were 0.7kg lighter than July last year.
Mr Ashworth suggested the changes to carcase weight prices for cattle could be having an effect.
“I do not think there is a suggestion lamb carcases are getting too big, but farmers may be more aware of the benefits of meeting specifications,” he said.
“Farmers are being more assiduous. The strong price is encouraging them to go through lambs at regular intervals.”