The sheep trade continues to regain ground, with factory quotes increasing by 20c/kg to 30c/kg in the last 10 days.

Base quotes for Thursday range from €5.40/kg to €5.50/kg, with all plants increasing their quotes by 10c/kg on the week.

This leaves farmers with normally-low negotiating power and quality assured (QA) lamb securing returns of €5.50/kg to €5.60/kg without any negotiation.

Wider differential

Sellers with some negotiating power are pushing returns to €5.65/kg, while prices at the upper end of the market have opened up a wider differential to base quotes, with factories anxious to tie into deals involving larger numbers and encourage producer groups to move higher numbers.

This has witnessed prices rising by 15c/kg to 20c/kg in cases and leaves top prices in the region of €5.75/kg to in excess of €5.80/kg when all bonuses and allowances on transport are taken into account.

Strong factory appetite continues to be reflected in the weekly kill. Last week’s kill again surpassed the 60,000 head mark and was recorded at 64,386.

This is 3,358 head above the corresponding week in 2019 and it now brings numbers slaughtered to date in 2020 to 1,442,029, which is an increase of 71,429 head on the corresponding period in 2019.

Eid al-Adha

Demand is being bolstered by factories starting to purchase lamb for the Eid al-Adha festival which starts on Thursday 30 June.

The main buying for the festival will take place next week and early the following week.

Demand will remain solid and factories are cautioning farmers to be careful when selecting lambs.

This follows an increase in the number of lambs killing below 17kg carcase weight or at fat score 1 and facing penalties rising anywhere between 60c/kg and €1/kg.

Factory agents also report some slippage in lamb presentation and lambs being recorded and assessed by the Department under the clean livestock policy.

IFA national sheep chair Sean Dennehy said: “Top prices of €5.90/kg including bonuses have been paid this week, while farmers are also negotiating on weights up to 21.5kg.

“Substantially lower volumes of New Zealand imports into the UK and across the EU has left the market short.

“New Zealand are reporting that their exports to the EU were down 28% in April and 15% in June compared to 2019 levels.”

The ewe trade is also strengthening, with quotes lifting 10c/kg to 20c/kg and ranging from €2.60/kg to €2.70/kg, while top prices are rising to €2.80/kg to €2.95/kg.

Northern trade

Demand in southern plants is also being driven by some marts in the North not holding sales this week and lower volumes of lambs in the market.

Southern agents have been active in trying to compensate through direct farm sales and are competing with northern agents.

Northern quotes remain unchanged at £4.70/kg, which is the equivalent of €5.19/kg at an exchange rate of 90.5p to the euro.

This shows the attractiveness of Northern Irish sheep. However, sellers competing at the top of the market and possessing stronger negotiating power are securing 10p/kg to 15p/kg higher.