The value of euro against Sterling has been declining steadily since March 2014 with €1 worth £0.79 last week compared to €1 worth £0.86 in the corresponding week last year.
According to the LMC, in general an increase in the value of Sterling against the euro increases the value of UK agricultural exports to the EU and, meanwhile, reduces the costs of agricultural imports such as feed and fertiliser. However, it says as the euro weakens against Sterling, UK red meat exports become less competitive on EU markets as product prices are increasing in euro terms.
The LMC says that, at present, a high proportion of Northern Irish lamb production is destined for the EU market and in particular France. The biggest competitor for this important export market is Irish lamb and when the euro weakens against Sterling, ROI produced lamb becomes more price competitive than NI produced lambs.
Therefore, when the euro is weak against Sterling, trading conditions for Northern Irish processors marketing beef or lamb is more difficult in EU markets.
The LMC also highlights that the euro/Sterling exchange rate also affects the level of export of lambs from Northern Ireland for direct slaughter in the Republic plants and thereby has a key role to play in the availability of lambs for slaughter in Northern plants.