Lamb prices forecast to stay high in run-up to Eid

New-season lamb prices should stay high for at least another six weeks, auctioneers have forecast, supported by the increased demand in the run-up to the Muslim festival of Eid.

The trade so far this year has been described as bewildering by some, with increased volume seeming to have little effect on values.

This extended selling period could be the start of a new normal, others have suggested, with farmers reluctant to let go of the premium prices.

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Prices to stay up

Russell Steer, Kivells’ auctioneer in Exeter, said the market’s peak spring lamb sales reached 25,000 in mid-May, up 9,000 on the previous highest total across nine years.

The market has been setting the pace, with liveweight prices the dearer and deadweight firms reluctant to compete, he said.

Exeter saw a throughput of just over 2,200 prime lambs on Monday (7 June), with an SQQ of 309p/kg.

The real demand was for lambs at 42kg and above, said Mr Steer, as processors sought a better killing-out percentage.

“I think there will be a decent level of demand going forward; it’s likely to fall away slightly, but I don’t see it dropping off a cliff until we get to Qurbani,” said Mr Steer.

Qurbani is the sacrifice of lambs aged six months or older during the festival of Eid al-Adha, which is due to take place in July. “We have seen a prolonged period of decent trade and some people are talking about it being the new normal,” he said.

“I think farmers will be very reluctant to go back to selling fat lambs for £75-£80. I think store buyers will be prepared to give £80 for a medium-term keeping lamb, and the fat price will stay up hopefully around the £100 mark.”

Many auctioneers have seen a huge amount of lighter lambs sold and out of the system already, which will help support prices.

Though anecdotally this year’s lambing percentage appears an improvement, the trend of selling the sheep at a lighter weight will likely have balanced out the market in terms of meat for the processors to sell, said Mr Steer.

Strong trade

Tom Wrench, auctioneer at Rugby Farmers Mart, pointed out that with a dearth of older lambs around, Qurbani may have more of an effect on the ewe trade.

However, there is still likely to be an increase in demand for lambs from restaurants and families during the festival.  

Rugby’s throughput jumped from 1,600 lambs the previous week to 2,300 on Monday, though the quality was poor, said Mr Wrench. 

“The export lambs are suddenly oversupplied; we have a couple of customers still struggling to sell lambs on the continent because they only want hoggs,” he said.

“The 38-41kg category was also massively oversubscribed. The heavy lambs are very dear, because the New Zealand stocks are disappearing again and having to be replaced by the home trade, I’m told. Most of our heavy lambs traded at more than 325-330p/kg and topped at £200.”

Mr Wrench expects supply to overstretch demand for the next couple of weeks before evening out.

“The bewildering thing is that the trade has been there even though there has been large numbers of supply throughout the year, and nobody can really explain that,” he said.