The downward spiral in the sheep trade appears to have steadied. Most plants are quoting a base of €4.50/kg with processors commenting that some price stability has entered the trade.

Demand for lamb is relatively strong, boosted by the fact that there are slightly fewer lambs in the market. This is shown in last week’s kill dropping just under 5,000 head to 58,582 head.

Factory agents have increased activity since the start of the week and are more active in sales and in direct purchasing off farms. However, they are not willing to budge on price, with top prices ceasing at €4.70/kg.

Most sellers, even with small volumes of lambs, are easily negotiating a price of €4.60/kg with the quality assurance (QA) bonus or lamb quality bonus alleviating this rise.

There are also more sellers securing a higher price of €4.65/kg to €4.70/kg today (Thursday). Kildare Chilling has increased its base quote for today to €4.60/kg.

Despite the stabilisation in the trade, confidence levels have taken a huge dent with the lamb price falling by an average of €20 per head over the last four weeks and below the €100 minimum mark many producers were targeting.

Processors say that reduced demand and lower prices in France, caused by a surplus of UK lambs, is maintaining pressure on the trade.

Prices in France for UK and Irish lamb are reported as falling below €5.00/kg. It is hoped that the spike in the UK kill will reduce in the coming week and alleviate some pressure on the trade. UK lamb is trading at £3.70 to £3.90/kg, or the equivalent of €4.91 to €5.20/kg.

The lower quote of €4.50/kg has reignited frustration in producer groups who are paid a base quote plus bonus.

Some group chairmen are digging in their heels and looking for allowances on weight to compensate for the lower prices. As yet, there are only a few reports of producers receiving a higher carcase weight limit of 22kg.

IFA’s Sheep Committee chairman John Lynskey said that the lamb trade is showing signs of rebounding.

He said producers were not prepared to part with fit lambs for less than €100 per head and are demanding an increase in carcase weight to 22kg to protect returns.

NI price pressure: There has been further price pressure in the northern trade. Prices have reduced 10p/kg on the week to a quote of £3.60/kg, or the equivalent of €4.80/kg including VAT.

The higher price and sterling trading at 79p to the euro means that there is less of an appeal for Northern traders to export lambs south.

This, along with a day’s less processing this week, has created a backlog in the trade, with plants maintaining a higher processing capacity to deal with the extra supplies.