Factories are becomingly increasingly concerned about lamb supplies next spring. Higher lamb mortality in 2018 could limit the carry-over into 2019 while a further decline reported in the number of farmers operating early lambing is putting significant question marks around supplies next spring. Another worry for factories is Brexit turmoil and the worst case scenario for their throughput of losing out on a steady supply stream of Northern Irish sheep which is likely to total close to 500,000 head in 2018.

Procurement managers are actively courting specialist finishers in a bid to encourage farmers to purchase stores and safeguard supplies. The most critical period appears to be Easter with Easter Sunday falling later than normal on 21 April.

There is normally a reprieve in demand after the Easter trade but next year factories will have to quickly turn their attention to satisfying demand for Ramadan which commences in the first week of May.

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Supply concerns

There are also supply concerns outside of this period with factories keen to tie into whatever supplies they can.

As yet, there seems to be little in the way of agreements completed with specialist finishers slow to tie into deals while offers on the table from factories are described by finishers as falling well below what is required to forego the opportunity of offering sheep to the highest bidder.

Getting back to current prices, factories have been pushing hard since the start of the week to reduce prices. The recent lift in prices allowed most farmers to negotiate €5/kg or higher last week and attracted more sheep onto the market. This is reflected in last week’s kill recorded at 65,125 head, a lift of 7,177 on the previous week. Kildare Chilling have held their base quote at €4.90/kg (+10c/kg QA) while Kepak have reduced theirs to €4.80/kg (+5c/kg QA) with both ICM plants 5c/kg lower and Dawn failing to provide a quote.