Eyes on spring margin with store lambs £12 cheaper

Hogg finisher margins could be supported by easier-bought store lambs this autumn as finishing costs rise and liveweight trade stutters around the 250p/kg mark.

National store lamb averages are back £10-£15 on the year, according to AHDB figures. Large numbers are now changing hands, but a lukewarm prime ring means budgets are tight.  

SQQs have been back at least 20p/kg on the year, and deadweight trade has trended 50p/kg lower at 550p/kg, with huge numbers being reported by deadweight outlets since September.

Long-term finishers will be hoping higher slaughter volumes are maintained before Christmas and trade is supported by a tighter supply in the new year.

However, imports, cost-of-living pressure on domestic demand, and exchange rate volatility are major unknowns that could pressure hogg trade in the spring. 

See also: Store lambs back £5 a head after dry summer

Grass back to life

October store lamb sales were tricky, but November saw dairy farmers return to the ringside and large finishers competing for medium- and long-term lambs for root crops.

This is Greg Christopher’s summary of trade at Hereford, where November prices have been back £10-£12 a head on the year but throughputs have been up by as much as 35%.

“There is a bit more keep about and stores were easier to sell in November than in October,” he said, stressing that buyers were exercising the usual caution, with nobody certain whether hoggs would be £3/kg or more from February onwards.

He said lamb producers cashing in early and prioritising grass for ewes and next year’s lamb crop had “done the right thing” in a weather-oriented market and with feed costs at £400/t this year.

He had seen exporters pick light lambs (8-12kg carcasses) out of the store ring for freight to Portugal, which was supporting hill lamb trade in the store and prime rings.

Rulebook torn up

“Turnip fever” may have come a little later than normal, but Scott Ruck, head of sales at Melton Mowbray, said the demand for store lambs and cull ewes to finish on root crops was now firm.

He said the best stores with cover (35-38kg) had been bought by abattoirs, which had taken 10-20% of the 1,000 head each week.

A load of 30-33kg stores averaged £85 recently, but he said feeding sheep might be the better option this autumn with “lean Mules aplenty”.

“A leaner grazing ewe at £60-£70 presents an opportunity,” he added. “Hopefully that can be improved to make £100 or more.”