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Sheep special: Tighter UK lamb numbers may help Brexit uncertainty

As the sheep industry heads into peak season, Alex Black assesses how the market is shaping up this autumn.

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Sheep special: Tighter UK lamb numbers may help Brexit uncertainty

Tighter supplies of prime lambs are expected over the next few months, following reports of higher lamb slaughterings earlier in the year.

 

And with uncertainty around where the market will go post-Brexit, it could provide some welcome support for the industry over the coming months.

 

AHDB analyst Rebecca Obourne says lamb prices have sat around the five year average over the past few months, with cull ewe prices also staying around the same mark.

 

She says: “It is all very much within normal ranges and it has followed the trend we would have expected.”

 

But lamb slaughterings have seen ‘more excitement’ with relatively strong numbers in the first part of the year.

 

“They were up from last year and higher than you would expect them to be,” she says, adding strong grass growth has helped them come forward a little earlier.

 

She adds there has also been a high number of cull ewes slaughtered, but it is too early to draw many conclusions until it is clearer what is happening about replacements.

 

Figures

 

Ted Ogden, auctioneer at Skipton, says it is good news sheep are coming forward to slaughter in ‘good time’ this year.

 

“In the slaughter figures for May, June and July, each of those three months is up,” he says.

 

“That is good for the shortterm.”

 

Domestic demand seems to have received a boost from the upcoming Love Lamb Week, with the weaker pound helping to boost demand overseas.

 

He adds store sales have been ‘well-supported’ with the good availability of grazing around the country following this summer’s weather.


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Mr Ogden also suggests some farmers may be grazing lambs over cattle, with the current difficulties faced by the beef markets.

 

“Prime sheep have held their value while prime cattle are falling,” he says.

 

“There is plenty of grass about, that is helping too.”

 

With the deadline of October 31 for the UK to leave the EU hanging over the industry – although it remains unclear what this would mean for the industry – it is business as usual for farmers.

 

Ms Obourne says: “It will have an impact. Exactly how much of an impact and on what remains to be seen.”

 

She adds the weakening of currency has given some support, but it is also unclear how this will play out in the coming months.

 

Demand

 

“With currency slightly weaker, sterling does tend to create export demand. It is all quite open. It could go anyway almost,” she says.

 

“It is a bit of an unusual year, but we seem to be trundling along as we have been.”

 

Mr Ogden says people had got ‘one eye on Brexit’ but farming had to continue.

 

“As my grandad says, ‘you cannot pay the rent farming fresh air’. Farmers have got to farm something,” he adds.

 

Russell Steer, auctioneer at Exeter, says Brexit was at the forefront of people’s minds.

 

“The store lamb trade [is seeing] plenty of demand for short keep lambs,” he says.

 

“For longer term lambs, they are at £40. Other years, we have seen a bit of trade. They are price driven at the moment.”

 

Jitters

 

He says the mood is not ‘downhearted’, but everybody is a ‘bit nervous’.

 

“There are just a few jitters and a few nerves. If we knew what was going to happen, we would cater for it,” he says.

 

He expects a lot of people will be selling sheep before October 31.

 

“I think you would be daft not to,” he says.“What actually happens with the trade beyond that I do not know.

 

“If we get a last-minute deal and farming is not sold down the river, then we could be alright come November.”

BREEDING SHEEP

 

BUYERS are being discerning at breeding sheep sales but farmers are willing to pay for quality.

 

Prices across the country have been above last year, with good clearance rates. But farmers are demanding quality.

 

At Skipton’s most recent breeding sheep sale, about 3,000 gimmer shearlings were sold, averaging £139.84/head.

 

“That is about £17 or £18 up on the year,” Ted Ogden adds.

 

And he says there are probably better quality sheep available.

 

“Farmers are still looking to purchase the better breeding stock and are then willing to pay.”

 

Russell Steer says in the South West, people are looking for sheep but they are hesitant when buying.

 

“There is still demand for early lambing sheep. But beyond that, it is hard work,” he says.

 

He highlighted those lambing later did not have substantial amounts to invest in ewes, but those who had sold lambs early were willing to give £130 or more for breeding ewes.

 

Mr Steer adds at this stage last year, drought was the main thing on people’s minds.

 

“After that, people simply did not want them,” he says.

GAINING CONTROL

 

GAINING control of genetics and estimated breeding values has been a major driver over the past few years, with lowland flocks looking at bringing through their own replacements rather than drafting them through the hills, according to Rebecca Obourne.

 

Farmers are taking control of their breeding lines by bringing in their own replacements, as well as protecting their farms against disease.

 

“We have seen a continuation in the use of estimated breeding values,” she says.

 

Margins

 

Ms Obourne adds people are also looking at importing some New Zealand genetics into their flocks as the industry looks to improve its margins.

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