More lambs on the market is pushing farmgate prices down across Europe. Farmers are getting paid 5% less than a year ago in Germany, Spain, France and the Netherlands.

Meanwhile, Ireland fared slightly better, with prices down just over 2%.

Disappointingly, during the start of August, the UK price has tumbled the most, with a 9% drop on the year.

Slaughter data

Slaughter data shows that during June and July, UK abattoirs slaughtered nearly 5% more lambs and that carcase weights were higher, compared with last year.

The number of lambs reaching the market has continued to rise seasonally into August, but because of the delays to marketings in 2018 caused by last year’s weather, slaughter numbers are now similar to last year, rather than well ahead.

Muslim festivals helped to lift prices at the start of August, but they fell away quickly afterwards.

Stabilising prices

There could be hope of the horizon according to head of economics at QMS Stuart Ashworth.

He said: “This week, prime lamb prices have seen some modest firming to bring them to very similar levels to last year.”

Also helping the market is the weakness of sterling in response to concerns that a no-deal Brexit is increasingly likely.

“Over the past month, the sterling exchange rate with the euro has gone from around 89p to €1 in mid-July to 92p per €1 in mid-August and has been weaker than a year ago since late May,” said Mr Ashworth.

“Thus, currently, an unchanged euro price would realise just over 3% more sterling value.”

The weak sterling and a lack of interest from New Zealand in the European market has helped the UK increase its exports of sheepmeat to Europe over the past quarter, with strong growth to Germany, but also increased deliveries to France, Belgium and the Netherlands.

On the home market, Kantar Worldpanel retail sales data also shows some growth in the volume of fresh and chilled lamb bought by UK consumers in recent months compared with last year.

According to Ashworth, this may be associated with the very different weather conditions this year compared with last, although there has been some reduction in retail prices.

“Despite the growth in exports and, in comparison to last year, a modest increase in retail sales providing some short-term positivity, which has perhaps helped support short-keep store lamb prices at early sales, the uncertainty over terms of trade in November remains as a dark cloud on the horizon,” concluded Ashworth.