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A surge in grass growth over the past month has brought strong demand from farmers looking to source store lambs.
Over the past few weeks, heavy-fleshed lambs typically weighing 38kg-40kg have sold upwards of £70 for good-quality types, often with either Texel or Suffolk breeding.
Lambs weighing 35kg to 38kg are going for £66- £70 for good-quality lambs, with plainer types making £62-£65. Lighter lambs have sold from £60, depending on quality.
The high demand has brought increased prices, but while lambs are an effective way to convert surplus grass into money, there is a limit to what farmers should pay.
Budget
Completing a quick budget can help in decision-making and should be based on prices that reflect current markets.
Start off by identifying how much area there is to graze. A comfortable stocking rate for autumn grazing on productive ryegrass swards is 10-12 lambs/acre, which is the equivalent of one store bullock or heifer.
Target finish date
Next, identify when you plan to sell lambs. Assuming that lambs will be grazed on good-quality grass, weight gain in lowland crossbred animals should be 180g-200g/day, or 1.25kg-1.4kg/week during autumn.
Killout percentage will be lower in lambs killed off autumn grass. Therefore, at a 43% killout and a target carcase weight of 21kg, lambs must reach a minimum of 48kg before drafting for slaughter.
This means store lambs purchased at 35kg-37kg will take eight to 10 weeks to reach target slaughter weight.
Lambs purchased this week at this weight should reach slaughter weight by mid- to late October.
Sale price
Lamb price during October 2018 and 2017 was typically 380p/kg. Assuming the same price is being paid this year, lambs are worth £79.80 at the 21kg carcase limit.
Allowing for grazing and miscellaneous costs of £5-£6/head, along with a profit margin of £5/lamb, the purchase price needs to be £67-£69/lamb, which is broadly in line with current prices.
However, if concentrates are required due to dwindling grass supplies, or to boost lamb performance during the autumn, then the margins will be quickly eroded.
The uncertainty around Brexit must also be factored in. If the UK exits the EU on 31 October 2019 without a deal, the industry faces a potential oversupply in November, assuming access to the French market is curtailed. There is also a possibility that a surge of lambs might come to the market ahead of the 31 October leaving date, undermining prices. Buying store lambs always comes with risks, but the risks are greater this year.
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