Scarcity and bird flu fuel price rise

By Peter Young

Hoggets prices have jumped again this week. The lift is fuelled by tighter numbers as well as a slight increase in demand after the bird flu outbreak.

The extent of the drop in numbers is clearly seen in the Department kill sheets. Two week ago there was just 38,486 head killed of which 31,160 were hoggets. That was 8,000 head back on the same week last year.

Talking to some factories they predict that just 36,000 sheep were killed last week and the volume is likely to stay at this level for a couple of weeks. The scarcity forced the factories to lift base quotes to 364c/kg early in the week but even this wasn't enough to secure enough lambs. Larger feeders and agents started getting calls from factory buyers that they haven't heard from in over three years.

Using the situation to their advantage they were able to secure between 380c and 383c/kg for good quality hoggets.

Some feeders are holding out for 390c/kg early next week, and others are predicting that prices will rise even further. The possibility of this was seen in the marts where scarcity helped good heavy hoggets make up to €40 over their weight, which is at least 400c/kg deadweight.

Northern Ireland

The quotes in Northern plants jumped by 15pstg/kg in the week. From a base of 225pstg/kg last Wednesday the factories had backdated their quotes to 230pstg/kg by the end of the week. On Monday they lifted quotes to 235pstg/kg but three of the main plants had to go to 240pstg/kg for today (Thursday) to get lambs. This is equivalent to 382c/kg incl VAT.

It means that Northern factories are on a higher price than the southern ones, which at the very least should slow the number of Northern lambs coming down south.

GB

Plants in England have also had to lift their quotes. One factory I spoke to was paying 250pstg/kg (up 10p) for good hoggets, which is 398c/kg incl VAT. As in Ireland the lift in price is reported to be mainly due to lower numbers, although they expect increased demand if further outbreaks of bird flu emerge. In the live marts number were reported to be 14% back this week. This lifted the SQQ to 109pstg (371c/kg incl VAT).

France

The bird flu has had no impact on the French market where prices have remained stable at between 390 to 400c/kg excl VAT. Spanish lambs continue to appear.

The early French lamb also appearing is being bought for a disappointing low premium over the rest of the market. In France the forecast suggest numbers will continue to decline in 2007 reflecting the fall in the breeding flock.

French production is estimated to be 123,000 tonnes, down 1% but disappointing consumption is anticipated to fall by an equal amount, meaning there will be little change in French sheep meat import requirement

Ewes

Cast ewes have remianed stable with top prcies achieved at 182c/kg.