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Factories are attempting to put a lid on prices paid and restrict any further price increase in the short term.
At the beginning of the week, farmers were freely securing prices of €5.50/kg to weight limits of up to 24kg.
However, as the week progresses, there are signs of factories trying to bring top prices paid closer to official quotes, with an increase in offers around the €5.40/kg mark. Where there are a number of quality assured (QA) fleshed lambs available, deals of €5.45/kg to €5.50/kg are still being done in certain plants.
Some plants have also started handling lower numbers and operating on a three- or four-day kill in an effort to stifle momentum and reduce demand for lambs. One sheep factory bemoaned prices were too high for the demand that is currently in export markets.
On the other hand, low domestic numbers will limit the ability of factories to make a sizeable price correction.
Tight supplies are reflected in last week’s kill falling 2,000 head to 41,992 and it is difficult to see prices settling at the lower end of the scale for a prolonged period.
The price reduction can be seen in marts, where prices reduced by €2 to €3/head for finished lambs compared with last week, but this was only evident in some sales and this price variation is not evident nationwide.
In sales where prices are coming under pressure, factory agents have been attempting to dig their heels in at lower prices, but then are willing to go the extra distance when they have to secure a number of quality fleshed lambs.
The supply-demand balance over the next couple of weeks will have a big bearing on how successful an attempted price reduction may be.
In terms of quotes, only one of the main export plants offered lamb quotes this week.
Kepak remains on its quote of €5.20/kg (+15c/kg QA), with Irish Country Meats, Kildare Chilling and Dawn Ballyhaunis failing to quote for lambs.
Ballon Meats and Moyvalley are on strong quotes of €5.50/kg and €5.40/kg respectively.
Northern trade
In the North, lambs are trading at £4.30/kg (equivalent of €5.12/kg). The number of sheep imported south for direct slaughter last week reduced 1,080 head to 6,979. This is significantly lower than the 9,076 head imported in the corresponding week in 2018, with year-to-date imports 4,153 head lower at 52,769.
Average prices in the UK have fallen this week and are now at £4.26/kg (equivalent of €5.08/kg including VAT).
Cull ewe prices are holding steady despite the negative sentiment around lamb prices. Quotes are ranging from €2.70/kg to €2.80/kg, but some farmers with heavy fleshed ewes are securing €2.90/kg.
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