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After a number of weeks of upward momentum in the sheep factory trade, prices have come under some downward pressure in recent days.
While demand for lambs remains firm, factories have been more cautious in their purchasing activity and were reluctant to stand on quotes into this week.
A number of plants have reduced their base quotes by 10c/kg, including Kildare Chilling which is offering a base quote of €5.30/kg plus 10c/kg quality assurance (QA) bonus.
Reports indicate plants in the west have also eased prices back by 10c/kg, while the two ICM plants in Camolin and Navan have a more positive story and are remaining on their base quotes of €5.20/kg plus 10c/kg QA. The group says it is watching markets closely and taking quotes day by day.
Price pressure
The pressure on prices has also been felt at the top end of the market. This has cut the wide price differential that was present between what plants were quoting and what they were willing to pay to regular sellers.
Top prices paid to farmers for deals negotiated today are reported as ranging from €5.35/kg to €5.45/kg, with some individual sellers and producer groups securing higher by means of factories covering transport costs.
Factories are keen to maintain a high level of throughput
The prospects for lamb prices still look positive despite the week starting off from a weaker position.
Factories are keen to maintain a high level of throughput and this, combined with a vibrant store lamb trade, should help to keep a floor under the trade.
The positive weather forecast is also likely to play a role, with an improvement in ground conditions and better grass utilisation reducing the pressure on producers to move sheep.
Positive prospects
IFA sheep chair Sean Dennehy and a delegation from the IFA met with Meat Industry Ireland (MII) on Monday. Sean said MII was cautiously optimistic on market prospects for the coming months, with demand likely to hold reasonably strong.
Sean said: “There are good indications for the lamb trade for the remainder of 2020. There are 75,000 extra lambs processed so far this year and while good weather in spring is likely to have resulted in higher numbers on the ground, reports suggest there are higher numbers of ewe lambs being retained for breeding in 2020 or to run dry as hoggets.
"The volume of sheepmeat produced on a weekly basis is also lower due to lambs being drafted at lighter weights and all of these factors combined are forming the basis to remain positive about sheep markets.”
Northern trade
The trade for lambs in Northern Ireland is steady, with quotes remaining at £4.45/kg to £4.50/kg. This is the equivalent of €4.83/kg to €4.88/kg at a weaker sterling to euro exchange rate of 92.2p.
The weakening in sterling is allowing agents purchasing on behalf of southern plants to maintain their purchasing intensity, despite prices in the south easing. This is helping to keep a good floor under the trade, with mart sales continuing to perform well.
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