Lamb processors have cut prices by as much as 50p/kg in the past two weeks, wiping over £10 per head off the sale value of a 21kg carcase.

This week, factory quotes have fallen to 440p/kg, down from 460p/kg last week. Just two weeks ago, lambs were consistently selling from 490p/kg to 500p/kg. However, farmers and producer groups are resisting the price cut and reports suggest they have had some degree of success, with some plants raising their quote to 445p/kg, and 450p/kg being paid mid-week. Other producer groups indicate they are holding out for more next week.

Factory agents point to increasing numbers of finished lambs on the market, and slower sales as the main holiday period starts, as reasons for the current price drop.

But farmers argue that cutting prices is nothing more than processors trying to control the market.

While competition in marts between buying agents for northern and southern plants has eased since Ramadan ended last week, mart prices are still running £3 to £8 per head higher than factory prices.

In addition, there have been reports that some agents for NI factories remain active this week across several marts, typically paying £97 to £102 per head for good-quality lambs. With plenty of grass on farms, producers are currently in no rush to offload lambs especially with lower prices on offer. In addition, there are indications coming from producer groups that members will be more inclined to wean lambs early should prices remain subdued.

With lambs weaned early and treated for parasites, it will act to stem the flow of lambs coming on to the market in July, causing the supply of finished lamb to tighten.

Scotland

In Scotland, prices of 480p/kg to 500p/kg have been paid this week, raising the prospect that some producer groups in NI might look to sell lambs direct to Scottish plants if the price gap remains.

Ireland

In the Republic of Ireland, plants have also tried to pull prices but with limited success. Lamb numbers coming onto the market are tighter than factory agents would like.Prices paid are running well ahead of quotes with southern plants paying the sterling equivalent of 465p/kg to 470p/kg this week.