Farmers resist spring lamb price cuts as quotes drop further

Farmers appear to be selling more of their lambs through the ring to avoid taking lower prices at the factory gate.

Last week, some factory buyers moved to cut spring lamb prices by up to 30c/kg – effectively knocking €6 off the price achievable for a 20kg lamb carcass.

However, farmers have resisted these price cuts and have marketed more of their lambs through marts in recent weeks.

Official figures show that spring lamb throughput declined considerably during the week ending June 18, as just 36,328 head were slaughtered in approved sheepmeat export plants.

When compared to the previous week, this is a drop of 8,522 head or 19%. In addition, figures from the Department of Agriculture’s sheep-kill database show a considerable fall in cast (ewe and ram) and hogget slaughterings.

During the week ending June 18, some 6,437 cast sheep (ewes and rams) and 4,326 hoggets were slaughtered in the Republic – a combined fall of almost 4,400 head on the week earlier.

This puts the cumulative sheep kill for the year at almost 1.16 million head – a jump of 120,379 head or 12% on the corresponding period in 2016.

Price pressure continues

Despite the noticeable drop in slaughterings in recent weeks, spring lamb prices continue to remain under pressure.

Most buyers are now offering base quotes of 540-550c/kg (excluding Quality Assurance payments) – a drop of 30-40c/kg on last week’s offering.

Kildare Chilling continues to lead the way with an all-in price of 560c/kg. The two Irish Country Meats plants are working off an all-in price of 550c/kg and Kepak Athleague is starting negotiations with farmers at 545c/kg.

Spring lamb quotes:
  • Kildare Chilling: 550c/kg + 10c/kg QA;
  • ICM Camolin: 540c/kg + 10c/kg QA;
  • ICM Navan: 540c/kg + 10c/kg QA;
  • Kepak Athleague: 540c/kg + 5c/kg QA.

Furthermore, most of the plants continue to offer the same ewe price as last week; quotes for well-fleshed ewes are currently sitting at the 270-280c/kg mark.

Main markets

According to Bord Bia, the British sheep trade continued to remain steady last week as good demand was offset by higher supplies.

The SQQ live price for lamb in England and Wales made the equivalent of 561c/kg (deadweight) during last week.

In addition, Bord Bia also reports that the French sheep trade saw an uplift last week due to higher demand on the back of the Ramadan festival.

However, strong volumes are expected on the market this week and the recent heatwave in France is also predicted to negatively affect consumption of sheepmeat products.