The sheep trade continues to gain upward momentum, although this is not directly reflected in the static base quotes in plants in Ireland.

The approach being taken by factories is to maintain base quotes as is, with the hope of purchasing hoggets at similar prices from sellers with lower negotiating power and to deal directly with large-scale finishers and regular suppliers.

Factories are keen to tie into deals with the latter suppliers to develop a strong base from which to operate from.

Balance of power

However, these producers are fully aware that the balance of power in negotiations has reverted to their side and have dug in for higher prices.

This has pushed on prices at the higher end of the market by 5c/kg to 10c/kg and reports indicate top prices are in the region of €7.20/kg to €7.30/kg, with some deals also covering part or full transport costs.

Many individual sellers handling smaller numbers have set €7/kg as the minimum price they are willing to move sheep from and are gaining increased confidence by having a vibrant mart trade as an alternative outlet.

This is resulting in a high percentage of hoggets trading from individual sellers from €7/kg to €7.10/kg.

The cull ewe trade has also firmed, with factories quoting a price of €3.60/kg to €3.70/kg and paying 10c/kg to 20c/kg higher to sellers handling significant numbers.

As detailed in the sheep mart comment below, competition is being fuelled by live export buyers and wholesale buyers who are competing with factory agents.

This is occurring against a background of tight supplies and this is reflected in the ewe and ram kill accounting for throughput of just 4,436 head in last week’s kill of 51,730.

The kill is marginally lower than the previous week, with 801 fewer sheep processed and this also conveys the situation of hogget supplies gradually falling.

Northern trade

Northern Ireland plants have had to increase quotes to compete with agents active in mart and direct farm sales and sourcing sheep for direct slaughter in southern plants.

Base quotes are in the region of £5.65/kg or the equivalent of €6.71/kg.

Prices on offer at the higher end of the market are 5p/kg to 10p/kg (£5.70/kg to £5.75/kg or the equivalent of €6.77/kg to 6.84/kg).

When comparing prices, it is important to note that Northern Ireland producers do not receive the VAT top-up of 5.6% that farmers who are unregistered for VAT in Ireland do.

The strengthening in the trade has brought prices on a par with British prices and closed the differential which had existed for the last few months.