Lamb prices hit £7/kg at abattoirs and likely to stay high

A flying finished lamb trade and a positive outlook for the spring will offer some confidence to sheep farmers during the next few months.

Strong retail demand, tight supply, increased export trade and firm buyer interest in the build-up to Ramadan should all help to offer short-term support.

The deadweight lamb SQQ averaged £7/kg for the week ending 24 February, up 37% (189p/kg) on the same week last year.

See also: Sheep lead the way as UK exports grow in value in 2023

Tight supplies of lamb have left processors looking for stock, with GB estimated slaughter figures back by about 8% compared with this time last year, to less than 200,000 head a week. This is due to a smaller lamb crop in 2023, and adverse weather slowing finishing on farm and restricting the number of hoggs coming forward.

Meanwhile, this year’s early lambers are being affected by a rise in cases of Schmallenberg disease, which could limit throughputs moving forward.

In Scotland, R3L-grade lambs averaged 696p/kg deadweight in mid-February, while old-season lambs at Scottish auction marts have been averaging about 315p/kg liveweight.

Liveweight

Iain MacDonald, market intelligence manager at Quality Meat Scotland, said: “Compared with February 2023, when the lamb market had a weak start to the year, prices have been running 35-40% higher at Scottish marts, with the increase on the five-year average price closer to 30%.”

He added: “Store markets have also rebalanced substantially higher, with finishers paying an average of £101 for hoggs at Scottish marts in mid-February. This compares with £65 in the same week of 2023.”

In England and Wales, auction markets have been well supported, with finished lambs averaging 322.8p/kg. Auctioneers say buyers remain keen to fill orders for retail and export, but numbers remain tight.

Frome auctioneer Ross Whitcombe said the lamb trade has been good recently for all types of sheep, noting a narrowing in the gap between “handy-weight” export lambs and “heavies” in the past few weeks.

The latest trading at Frome put 40-50kg lambs at about 320p/kg liveweight, topping at 355p/kg liveweight.

He said the lamb trade should be strong through Ramadan and Easter, and questioned whether there would be a shortfall of domestic lambs around Easter and into April.

Global trade

Prices on the Continent have been well supported, with wholesale R-grade lamb carcasses averaging €11/kg (£9.40/kg) at Rungis, Paris, on 27 February.

Mr MacDonald said: “Overseas demand has also underpinned the market, with UK trade data showing that export volumes were significantly higher than import levels in late 2023, resulting in a tightening effect on market supply.”

On the flip side, UK import volumes are forecast to rise during the first half of 2024, but disruption to global shipping has reportedly affected vessels coming from New Zealand and Australia.

He added: “More recently, it is possible that longer shipping journey times to Europe from Oceania could have delayed import shipments and resulted in a risk premium in the marketplace, where concern about the arrival of imports may have brought forward purchases of domestic product.

“This may have also supported export demand from the EU, where traders will have faced the same concerns.”