The recovery in factory prices for fat lambs, referred to at the end of last week’s sheep trends, has arrived a week or two earlier than expected.
After last week’s price cuts, factories started the week on the hunt for sheep and this ultimately led to prices rebounding.
Kildare leads the way at €6.10/kg, plus 10c/kg quality assurance bonus, and this was the quote offered for today, Thursday. Kildare is quoting lambs under 16kg at €5.00/kg, with ewes at €3.20/kg plus 10c quality assurance up to 40kg.
ICM is quoting €5.90/kg plus 10c/kg quality assurance bonus. As always in a strengthening market, quoted prices are often a starting point for negotiation.
IFA sheep chair Sean Dennehy said there are reports of prices up by 20c/kg on last week, with as much as €6.40/kg available for larger lots and groups and weights of up to 21.5kg being accepted. He said: “The orderly selling of lambs this year is ensuring there will be no glut of lambs coming on to the market. The absence of imports from outside the EU in the marketplace is also a significant contributor to the positive market conditions.”
Southern buyers were particularly active in the north last week, and this is reflected in an increase of lambs coming south. Last week, 7,986 lambs travelled south for processing, an increase of 1,398 on the previous seven-day period.
Southern buyers remain very active for northern lambs this week, paying around £110 per head in marts, which works out at £5.20/kg deadweight, or €6.45/kg including VAT.
The sheep trade in Northern Ireland is also benefiting from agents from southern factories offering to pay on up to 21.5kg for group lambs, giving them an clear edge on their Northern Ireland counterparts.
The strong interest from southern buyers has helped to drive the trade on in Northern Ireland as well this week. Prices have strengthened by 15p/kg to 20p/kg (17.5c/kg to 23.5c/kg), pushing base quotes up to between £4.95/kg and £5.00/kg (€6.15/kg and €6.20/kg inc VAT) rising to £5.10/kg (€6.32/kg) for larger lots
The higher carcase weight limit has also become a feature south of the border as well, with most groups able to secure payment on 21.5kg, with sporadic deals agreed at 22kg although this is reflected in lower bonus payments.
With a scarcity of supply across the water, the lamb trade in Scotland has also been boosted, with factories deciding to pay to 22kg carcase weight and prices on 500p to 510p/kg (€6.20 to €6.32/kg).
The stronger prices this week reflect a strengthening market. There was a big jump in number of lambs going into the factory last week after falls for the previous four weeks. The kill was up almost 12,000 on the week before at 62,034, which includes 9,946 ewes and rams. In Britain, numbers were back 6,672 last week, with a kill of 42,401. Average price according to AHDB was £5.16/kg, the equivalent of €6.07/kg
Scarcity of supply is helping lamb price. UK exports are down over 10,000t for the first half of 2021 from 40,566t to 30,449t. New Zealand exports to the EU are continuing the falling trend of recent years with just 65,525t entering the EU between October 2020 and July 2021 compared with 77,044t for the previous period.