Winners and loser in the sheep trade

By Peter Young

The best sheep producers Ireland has to offer were on show at the Bord Bia quality beef and sheep producer earlier this week. Overall sheep winner Offaly farmer, Andrew Moloney was a worthy winner. However the underlying financial trend of the farmers compared to the competition entries two years previous highlighted a decline in the profitability of sheep. This was is stark contrast to a jump in beef profits. These farmers were efficient and had scale so it showed that these alone are not the answer.

The Sheep Strategy Implementation group got back to work on what will be needed this week. Two of the key issues discussed were pricing structure and breeding. IFA's Henry Burns put forward a proposal for government funding of €30m per year for a range of measures aimed at delivering the key objectives. It will all be needed.

Back to the current trade most factories are quoting a base of 344 to 347c/kg (123 to 124). Farmers are able to secure 356 to 338c/kg (127-128) when bonuses are included with a few deals worth 361c/kg (129) being hammered out.

Factories are reporting fewer underfinished lambs (15-16kg) coming up the line. This is probable more to do with the lift in the store trade in recent weeks. The rise has sucked in the under finished lambs and with the boost in grass growth is also tempting the farmers that swore they would never touch store lambs again after the last two years.

Light lamb

There is increased demand for light lambs. Prices are between 325 and 330c/kg (116 to 118) although poorly graded lambs are quickly knocked down to as low as 280c/kg. Some farmers are angry that the harsh grading is the factories attempt to get a lower average price. Farmers should be very careful not to put underfleshed lambs into the factories, especially with the store trade rising. Even good quality scotch wethers got a lift this week selling up to €6 over in Miltown. Scotch ewe lambs made up to €10 over with cross bred lambs making up to €20 over the weight

The breeding sales are also getting a boost with increased demand for good quality hogget ewes.

France

In France the trade is very steady. Irish lambs continue to get 380c/kg to 385c/kg excl VAT. The start of Ramadan on 24 September is expected to give the trade a boost.

The UK market started strongly on Monday with the average SQQ price at 108pstg/kg. (357c/kg incl. VAT.)

An increase in numbers on Tuesday resulted in a price slide to 105pstg/kg (347c/kg incl. VAT)

The trade appears to be strongest in Northern Ireland. Factories have kept the base quote at 235pstg/kg (365c/kg incl VAT) up to 21kg. Foyle continues to pay up to 21.5kg but at a lower quote of 230p/kg (357c/kg incl VAT). In the South more plants are paying up to 22kg at this stage.