PRIME lambs saw strong price rises at UK auctions last week following months of heavy downward pressure.
Tightening numbers, a more favourable exchange rate and the run-up to the upcoming Muslim festival of Eid al-Adha (September 22-23) all contributed to an 11p/kg boost in the GB SQQ during the week to September 2, increasing to 155p/kg.
GB liveweight prices are now 2p/kg adrift of the same point last year and the price gains seen in live rings were expected to be followed by rising deadweight prices.
Ted Ogden, auctioneer at Skipton, said the mart had 5,000 sheep in last week but many places saw reduced numbers.
“Numbers were less in a lot of places. They were 20-25 per cent less,” he said.
“There has also been a bit of lamb promotion from retailers in response to British Lamb Week. The pound to euro exchange rate [has moved] favourably and this would help the export situation as well. There has been a few things in our favour.”
Mr Ogden said trade was approaching peak season for the supply of British lambs.
The theory prices may have been aided by retail lamb promotion was echoed by Stuart Ashworth, head of economic services at Quality Meat Scotland (QMS).
He claimed prices had increased across the livestock sector, but lamb prices may struggle to reach last year’s levels as the market remained well supplied.
Mark Kozlowski, senior analyst at AHDB Beef and Lamb, suggested there could be further gains due to increased demand from Eid al-Adha.
“The general outlook looks brighter than it did a month or so ago. One of the key factors to prices will be how many more lambs come through,” he said.
“Eid will increase demand and, if the pound-euro exchange rate continues in the way it has been, this could be positive for the trade.”
The euro has strengthened relative to the pound, increasing from roughly £0.70 to £0.73 to the euro since late August. A weakening pound makes UK exports more competitive on the European market.
But Mr Ashworth said the European export market remained challenging.
Prime cattle’s price recovery appeared to continue in recent weeks with average deadweight prices steady.
In the week to August 29, average prices were unchanged, at about 344.9p/kg, following increases toward the bank holiday weekend.
Prices have faced significant pressure throughout much of the year but, with the prospect of tighter supplies ahead, AHDB suggested the market could be tipping in favour of producers.
An AHDB Beef and Lamb spokesman said: “Against the backdrop of tighter supplies ahead, particularly as cattle coming off grass could be slower to finish than previously expected, any small lift in demand could well stimulate greater competition in the market as autumn progresses.”