It has not been an easy week for sheep farmers, with downward pressure continually being placed on prices. Last week, base quotes came down by 20c/kg to 40c/kg and further cuts of 20c/kg to 30c/kg are being placed on base quotes this week.

Both Kildare Chilling and Kepak Athleague were unable to quote this week. Many producers feel now that factories are trying to reduce prices as far as they can go while they have the downward momentum, pressurising farmers to accept lower prices.

Factories point to reduced demand for fifth-quarter products in China, increased New Zealand exports and a greater supply of Spanish lamb to central Europe as the reasons for the falling prices.

The number of lambs and hoggets being killed domestically is certainly not a factor for the reduced quotes. One factory agent said that numbers are actually tighter than normal nationally and this is true given that the kill is back 1,328 head compared with the same period last year.

Prices secured by farmers is far higher than the base quotes, with €5.70/kg to €5.80/kg being paid for spring lambs. Specialised finishers with in-spec stock are securing even higher prices.

This year, the cost of getting a lamb to a marketable finish has been very high, with the wet, cold weather, and factories must consider this when setting prices.

Base quotes for hoggets have taken a tumble again this week of 20c/kg, but farmers are securing higher prices of €5.20/kg to €5.30/kg, especially where they have a number of good-quality and fleshed lots.

IFA national sheep committee chair John Lynskey said an analysis of supplies shows that hogget numbers are tightening rapidly and the move on price is an attempt by the factories to force out remaining numbers. He said last year, the lamb kill was up 67,000 head and so far this year, the hogget kill is up 29,000 head.

With no additional ewe numbers in the system and northern imports down last year, this means the hoggets are already slaughtered.

In addition, he said feedback from finishers is that remaining supplies will be much tighter than last year, when prices held up well.

Poor appetite

Northern processors’ appetite for sheep remains poor. Plants also point to tough market conditions and current complications in handling a mixture of hogget and spring lambs.

Plants have taken a heavy 20p/kg to 30p/kg from last week’s quotes, with hoggets reducing to £3.70/kg to £3.90/kg (equivalent of €5.05/kg to €5.32/kg), with spring lambs reduced to £4.20/kg to £4.30/kg (equivalent of €5.73/kg to €5.86/kg including VAT).

Exports south for direct slaughter have reduced 1,600 head to 4,209 sheep.