Processors hit back at lamb margin ‘pocketing’ claims
Processors have hit back at “misleading” claims made by the Irish Farmers’ Association (IFA) that extra margin has been pocketed, outlining that current lamb prices are due to “extremely challenging market conditions.
In a statement today, Friday, July 5, Meat Industry Ireland (MII) issued a riposte to the IFA, stating:
“The overall lamb trade is in a very difficult place at present, particularly the export business which accounts for over 80% of our output and even more at this time of year.”
MII said: “Processors reject the IFA claim of extra margin been pocketed, which is simply misleading, when in fact the industry is contending with extremely challenging market conditions.
We are seeing weaker demand for lamb in key continental markets due to lower consumption levels, coupled with very competitively priced UK lamb in the marketplace and a collapsed global lamb skin market.
The representative group outlined that the above reasons are the factors behind the deterioration of lamb prices here in recent weeks.
It added: “Processors understand the frustration of farmers with these price falls but it is reflective of what is happening in the marketplace.”
Specifically referring to the IFA’s survey on the matter on the retail price of lamb in Ireland, MII said: “The latest Kantar data for the four weeks ending June 16, show lamb retail sales volumes down 0.6% and price down 2%.”
- Customers reporting weaker consumption figures due to very hot weather in Europe and continued negative media coverage around red meat. This has softened demand which would normally be expected to pick up coming into the BBQ season;
- In the absence of life in the BBQ trade, opportunities for loin, leg steak and manufacturing product are below normal;
- UK and European buyers have large carry-overs of stocks of NZ leg and loin cuts;
- In the UK, where lamb supplies are about to see their annual surge, we have already seen significant weakening in prices. Lamb prices there are in the region of £4.10kg or €4.57kg;
- Irish exporters are now facing stiff competition from UK lamb in continental markets. This has hit just as Spanish lamb volumes started to ease off in the market.
- The global market for skins has hit an all-time low, where skins are valued at zero and heading towards becoming a disposal cost.
“The home market is certainly important to our lamb sector and has been a positive feature of the overall business mix in recent years, but accounting for less than 20% of our overall lamb output, it is just not a sufficient counter-balance to poor demand and price pressure in key export markets,” the MII statement concluded.