For much of 2021, producers have held the balance of power in negotiations on lamb price, with farmgate prices for the year to date averaging €6.62/kg (€6.99/kg including VAT) according to Bord Bia.

This represents an increase of €1.38/kg on 2020 levels and €1.86/kg above average prices in 2019.

However, the year is winding down with the balance of power in negotiations returning to factories.

This has been underpinned by a spike in throughput in recent weeks.

Last week’s throughput of 60,503 head exceeded the 60,000 mark for the first time since mid-October.

It follows throughput of over 59,000 head in the previous week.

While market demand is firm this increase in throughput has afforded factories an opportunity to fill the last of the Christmas orders and build a supply ahead of themselves.

This has reduced the pressure on agents to compete for lambs and offer higher prices to entice numbers forward.

As a result, prices have eased by 15c/kg to 20c/kg over the last fortnight.

Base quotes

Base quotes are in the region of €6.85/kg to €7.00/kg, leaving quality assured lamb selling from €7.00/kg to €7.10/kg over the last week for producers with lower negotiating power.

Kildare Chilling finishes the year in the position it has held for most of the year, offering the highest base quote.

The plant is quoting a base of €7.00/kg plus 10c/kg quality assurance bonus for Thursday 23 December.

Sellers with greater negotiating power and producer groups have seen their hand weakened in negotiations due to higher supplies, with prices averaging around the €7.20/kg mark.

At the higher end of the market, prices are typically in the region of €7.25/kg to €7.30/kg, with this price also including group lambs receiving conformation bonuses.

Factories have also been under less pressure to offer sweeteners, such as allowances on transport costs.

The strong supplies has seen factories being offered higher numbers for next week’s reduced kill, which in turn is creating uncertainty about supplies some factory agents had lined up with specialist finishers for the period between Christmas and the new year.

Table 1 shows the days on which factories plan to slaughter sheep.

Reports indicate that prices being discussed are now in line with those described above, which is a reduction of 10c/kg to 20c/kg on what some producers had expected to receive.

Sales are expected to perform positively over the Christmas period, which should hopefully see a quick return to normal service in January.

Northern trade

Northern Ireland plants have also tried to ease the trade back, with base quotes in the region of £5.60/kg or the equivalent of €6.50/kg at 85p to the euro.

Regular sellers and specialist finishers are securing returns ranging from £5.70/kg to £5.75/kg and possibly 5p/kg higher at the top end of the market.

Throughput is also holding firm, with last week’s sheep kill 120 head higher at 9,548.

The number of sheep exported south for direct slaughter reduced by 2,422 head to 6,155 on the back of reduced demand from southern plants.