Lamb market on a rollercoaster road to recovery

Farming correspondent

Thursday 19 July 2012

The Scottish prime lamb market has been something of a rollercoaster over the past two months.

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Market returns were particularly disappointing during May, but recovered through June to a point where they were just ahead of last year.

However, the first week of July saw prices fall sharply and dip back below last year's levels before recovering slightly in the second week. With the Muslim holy month of Ramadan starting tomorrow, lamb prices firmed on Monday by 11p per kg at Lanark, and 10.3p in St Boswells, with hope of demand remaining reasonable in the short term.

"The variability in the market is making it difficult to determine the short to medium term for lamb producers," said Stuart Ashworth, Quality Meat Scotland's (QMS) head of economic services."A number of elements are influencing the market. New season lambs have been slow to arrive on the market, perhaps not surprising given the impact of poor weather on growth rates."However, by the end of June, numbers coming forward were slightly ahead of last year, and although auction volumes dipped in early July, the total lamb kill remains slightly ahead of last year."As volumes built and major retailers could be assured of supplies, prices improved", said Mr Ashworth, observing that it is normal for prices to slide during July as volumes build even more. "Nevertheless", he added, it looks like this week's price has recovered to a level above this time last year."Evidence from price-reporting abattoirs does suggest that the weather has taken its toll on lamb quality and the proportion of lambs grading R3L or better is a couple of percent lower than last year. "Meanwhile the price for lambs that more closely meet market requirements have retained their value better than out-of-speci- fication lambs", said Mr Ashworth.The UK market is currently relatively well supplied with lambs, as is Ireland. Lamb slaughtering in Ireland are running ahead of last year by about 10%, perhaps not surprising given the increase in breeding ewe numbers reported in the Irish December census.Furthermore, there are reports of more plentiful supplies of Spanish and Portuguese lambs on the French market. So, not only is the UK market reasonably well supplied with lamb, so too is our main export market.More worrying is the fact that French producers are currently receiving 2.5% less than they did last year, while Spanish producers get 4%-5% less, making the export market much tougher, even before unfavourable sterling exchange rates are considered.A further complication on the lamb market is the influence of skin values which, said Mr Ashworth, have taken a tumble over the past quarter. "Sheepskin prices have fallen globally, and, while the general global economic gloom continues, sheepskin prices are not expected to recover," he added.

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Lamb market on a rollercoaster road to recovery

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