LOOKINGATPOST-CRISISMARKET…
LOOKINGATPOST-CRISISMARKET…
By Peter Crichton
UNTIL the overall picture concerning the UK sheep industry becomes clearer, it is difficult to predict the full implications of foot-and-mouth in the months and years ahead.
One certain fact is that with exports likely to be banned for up to three years, the UK could remain over-supplied with sheep meat by about 40%. At this stage, there are hopes that exports may be permitted on a regional basis before the end of the three-year period, but until then the home market remains the only outlet.
There are widespread fears that when new season lamb numbers start to pick up, they will overwhelm the home market and prices will fall.
In late April, when Sheep Update went to press, new season lambs were trading at £2.60-£3/kg deadweight. This resulted in an average return of nearly £30 a head for early lambing flocks. Although these early lambs will have received expensive creep rations, this may prove to have been a worthwhile investment if prices slip as the season progresses.
For store lamb producers, who normally supply the major store sales, the outlook is far more uncertain. Until MAFF issues clear guidelines on future patterns of store marketing through auctions, it is difficult to see how many store lamb producers will be able to market their stock to best advantage, especially when selling small numbers.
The Livestock Auctioneers Association is pressing MAFF to release guidelines on how auctions and collection centres will be run. Trade sources feel these are likely to be split into two categories – store and slaughter markets – with strictly controlled movements under licence only.
Auctions and collecting centres will have to provide washing and disinfection facilities. But at least this could pave the way for stock to be grouped together and moved in larger numbers to abattoirs and buyers holdings.
Sheep tagging – which became mandatory at the start of the year for all home-bred stock – will make MAFFs task of monitoring subsequent movement easier. It will also ensure producers comply with any standstill rules that may be announced.
For breeders who rely on summer and autumn auctions to sell breeding sheep, hopes remain that marketing arrangements will be announced within the next few weeks. However, in Cumbria, where large numbers of Mule ewe lambs are sold, the problem is two-fold. Not only will numbers have been decimated by the level of F&M slaughterings, but buyers may remain cautious about purchasing from areas which were infected heavily by the disease.
The main goal must be for exports to resume as soon as possible. Until this occurs, it is hard to see how the sheep industry can remain viable, especially in upland regions. Export orientated abattoirs will come under increasing financial pressure as they chase a dwindling number of outlets on the home market for rising numbers of lambs passing through the system. *
Auctioneers are pressing MAFF for guidance on how auctions should be run, says Peter Crichton.
market outlook
• No exports for years.
• Uncertainty over breeding sales.
• Movement limitations.