Tight supplies help to buoy up lamb trade throughout 2024

A shortage of finished lambs coming forward has helped to stabilise the market during July and hold farmgate prices above last year’s levels.

Deadweight lambs were 67.5p/kg higher than the same week last year for the week ending 27 July, with the deadweight SQQ averaging 649p/kg. Prices were also up by 1.8p/kg on the previous week.

Estimated lamb throughputs have been about 20% lower than this time last year, with less product being available for both retail and export markets.

See also: Lambs hold above £6/kg as tight supply helps steady falls

The liveweight SQQ averaged 303.3p/kg at auction markets in England and Wales during the past week.

Auctioneers say quality lambs have been in short supply, with top prices being paid for well-finished stock across all weight categories.

Phil Hambling, head of corporate social responsibility at meat processor ABP, which accounts for 18% of UK lamb kill, said the past 12 weeks of historically high prices in the UK sheep market had provided a welcome injection of confidence for many sheep farmers, but maybe not enough yet to stimulate confidence and investment in growth.

“In terms of retail sales, the reality is that it has been pretty tough for volume, bearing in mind the UK is both a high-value and high-volume market,” he said.

“A big challenge for everyone is going to be hanging on to retain existing volumes of sales as we move forward.”

Mr Hambling added that farmer confidence was not where he would ideally like it to be after a couple of challenging years, with high input costs offsetting higher prices.

“The domestic market is suffering a bit, with some channels seeing double-digit contraction in sales because of where the price point has been.”

Mr Hambling believes prices this year will remain firmer than before, but he would be surprised if they top out again at record highs.

Kevin Harrison, policy and technical chairman at the National Sheep Association, added:

“I think one of the best things to do is to get your lambs finished in specification the best you can, and you’ll get the best value for them at the time.

“Once you start juggling around trying to hit the market at the right time is when you can get yourself in trouble.”

Exports

Demand for UK lamb in export markets has been a bit muted recently, following the highs seen earlier in the year.

Rizvan Khalid, managing director at Euro Quality Lambs, said he expects the trade to pick up in to September as lambs begin to come through in greater numbers.

“The UK retailers are currently taking a lot of the volume and we are finding there is less available for export at the moment.”

Profitability

A survey of 300 farms carried out by Promar International found that the average lowland farm was losing £10.20 per lamb sold for the 2022-23 lamb year.

Meanwhile, the top 25% of farms were gaining £8.85 per lamb.

In less favourable areas, farm businesses on average made a £12.40 per lamb loss, while the top 25% returned a £28.85 profit.

Neil Adams, managing director at Promar International, said one of the main differences between average farms and the top 25% was spending on machinery and labour.