13th October 2001

By John Shirley

There's a marginal lift in lamb prices this week with the factory quotes en bloc up 2 p a lb for French lamb to a base of 156 to 158p a lb. The lift must be due to the stronger mart trade and a tightening of supply rather than stronger prices in France.

The export plants report that the trade in France has levelled out following the softer market of recent weeks. Bord Bia too reports steady demand and prices in France and little change expected in the near future.

Up to 150 p a lb was paid and quoted for light hill lambs for Spain and Portugal. In Ireland and Britain all eyes are being focussed on a British report on the potential for BSE in sheep due out on October 19 next. The response to this could vary from nil change to a doomsday recommendation for a complete cull of the UK sheep flock with Northern Ireland thrown in. See sheep pages in this week's Journal.

As always rumour and speculation is rife that this could pose disaster or opportunity for Irish farmers.

Inevitably it will put more focus on older sheep and also on Scrapie. In a precautionary move the Irish Department of Agriculture has banged on a restriction on 30 Irish sheep flocks in which Scrapie has been identified with the intention of depopulating them. Presumably these flocks will be fully compensated. It may be a while before these farmers can re stock with sheep.

Even without the latest BSE threat, UK sheep farmers are punch drunk from the combination of the low ewe premium and disastrous price which has fallen down to the equivalent of 91 p a lb Irish. On a brighter note Britain has no FMD in the 1st 8 days of October. Lambs prices in NI have improved to about 235 p a kg. Or 140 p a lb Irish.

Marts

Lamb prices are definitely stronger in marts this week. Heavy lambs, 46 kg +, made up to £30 over the £ a kg in Tullow. Manager John Murphy reckoned that store and factory lambs were also dearer by about £3 a head. Slaughter outlets out bid the farmers for ewes lambs up to 50 kg. (This is taking out next years ewe hoggets.)

In Roscrea heavy lambs made £24 to £30 over, factory lambs made £16 to 325 over and stores about £21 along with the £ a kg.

Ireland seeks a £25 ewe premium

The European Parliament's vote on increased ewe premiums was taking place as we went to press yesterday (Wednesday).

The parliament's vote was the first step in a review of the EU policy for the sheep sector. The EU Farm Council will make final decisions by the end of this year.

Liam Hyland, Leinster MEP last week tabled several amendments, including an EU-sponsored promotion campaign for sheep meat, special measures to avoid serious market disruptions and above all a 32 euro (£25.27) ewe premium. This goes far beyond the European Commission's proposal of a 21 euro (£16.54) premium.

Following a meeting with the Minister for Agriculture Joe Walsh last week, the IFA president Tom Parlon has said that the Minister has given full backing and is determined to win a £25 ewe premium. The IFA sheep committee chairman Frank Corcoran told Minister Walsh that the EU Commission proposal of a £16.54 is totally inadequate and falls seriously short of what is necessary to allow sheep farmers earn a viable income from the sector.

Hogget scarcity looms for 2002

The penny has dropped. The reason for the big lamb kill over the past couple of months relative to last autumn is that flockowners are letting go their ewe lambs that would normally be kept for replacement.

This is the opinion of Teagasc specialist sheep adviser Andrew Kinsella and it is backed up by mart managers and factory bosses. All of these people are now concerned as to where the good breeding hoggets for the 2002 season are going to come from.

Creep feeding of lambs to push them out while the going is good and before France introduces new rules on spinal cords, may also be a factor. But this would not explain a lamb kill that is up 20,000 to 30,000 head a week from a declining sheep flock

Good prices have certainly attracted out ewe lambs that would normally be kept back for breeding.

In a normal autumn, lamb prices will be under pressure. The trade for breeding ewe lambs can often put a floor under the prices that the export plants must pay.

But this season the opposite has happened. Ewe lambs are freely worth £70 a head for slaughter and the breeding alternative is finding it hard to compete.

Headage

The change to area-based headage has also hit the replacement hogget business. Keeping extra hoggets does not attract extra Headage. A minimum stocking density of 0.15 livestock unit per hectare (with cattle, sheep, goats, horses, deer) renders the land eligible for area-based headage. Indeed fields that are in tillage are not eligible for the new area based headage even though they are within the disadvantaged area.

Assuming a 20% replacement rate, about 800,000 ewe lambs are needed as replacements for the national flock for the coming year. A few months of killing 20,000 to 30,000 of these per week will create a major dent in this figure and trigger a shortfall of hoggets next season.

Does this mean that breeding ewes will be very expensive next season? If your ewe lamb is worth £70 today, will she be worth double that next August?

This year breeders were reluctant to pay over £100 a head for the top hoggets. Some held onto their older ewes for another year instead of buying hoggets. Some have just got out of sheep.