The sheep industry needs to see a stabilisation of farm-gate prices to enable producers to continue to invest with confidence in their businesses.

That was the view of Charles Sercombe, livestock board chairman of the NFU of England and Wales responding to the recent collapse in sheep prices.

Mr Sercombe appealed to processors and retailers to take a long-term view of the market and to avoid sending out negative signals to farmers at a time when the national flock is showing signs of increasing, after many years of declining numbers.

"The boom-bust cycle of sheep pricing is not in the interests of the farmer, processor or retailer," said Mr Sercombe.

"We need retailers and processors to act in the best interests of the whole chain and work to stabilise the lamb market."

Mr Sercombe means well, but he is overlooking the fact that the market is responding to factors that processors and retailers have little control over.

Prices for prime hoggs (sheep born last year) this week are back about 60p per kg (-30%) on the corresponding sale last year, while prime lambs have eased similarly.

Some traders believe prices for prime lambs could slip further as more come onto the market at a time when big abattoirs are still concentrating on killing hoggs that are more plentiful.

The collapse in the trade is down to a combination of factors – the main one being the current strength of the pound against the euro. This time last year the euro stood at about 88p, but is now down to 80p, a fall of 10%. That, combined with lamb prices in Europe back about 9%, has put extreme pressure on exports that had risen by 11% in the 12 months to the end of March. Skin prices are also back around £6.

Finally, sheep numbers in both the UK and New Zealand are up this year, ensuring that the market will remain weak.

Lawrie and Symington sold 17 prime heifers in Lanark on Monday to a top of 264p per kg for the Champion in the Scottish Limousin Club's Show and Sale and an overall average of 215.8p (-3.7p on the week). Sixteen prime beef-bullocks sold to 230p and averaged 201.8p (+1.8p), while 17 prime B&W bullocks levelled at 165.5p (-4p).

In the rough ring 31 beef cows averaged 148p, while 19 dairy cows levelled at 126p. Seventeen OTM cattle averaged 164p.

The firm also sold 551 prime hoggs to a top of £90.50 per head and 157.7p per kg to average 139.6p, while 128 prime lambs peaked at £95.80 and 224.3p to level at 199.5p.

The 349 cast sheep forward saw ewes sell to £112.50 for Texels and average £74.03 (-£5.41).

Wallets Marts Ltd sold 263 prime lambs in Castle Douglas yesterday to a top of £82 and 200p to average 188.7p, while 65 prime hoggs levelled at 111p. Cast ewes were easier on the week.