The price pressure facing lamb producers drafting lambs has intensified, with base quotes for Thursday reducing anywhere by 15c/kg to 40c/kg on last week’s levels.
Kildare Chilling’s base quote of €6.50/kg is a reduction of 40c/kg on last Thursday and of 30c/kg since the start of the week. The two Irish Country Meats plants in Camolin and Navan are also quoting a base of €6.50/kg, which represents a reduction of 15c/kg.
The scale of the price pull in Kildare will reduce prices paid to producer groups working off a payment mechanism of average base quotes, while regular sellers are also facing renewed price pressure.
Prices up to Wednesday had ranged on average from €6.70/kg to €6.90/kg, with a high percentage of lambs trading between €6.75/kg and €6.90/kg and top prices reaching €7/kg.
Producers looking to trade lambs are being offered prices of €6.60/kg to €6.65/kg for quality assured lamb at entry level to the market, while regular suppliers and producer groups are reported as negotiating €6.70/kg to €6.80/kg.
Factories have also upped the ante on price penalties on carcases they deem overweight. Kildare Chilling is quoting a maximum price of €140 for carcases exceeding 25kg, while the two ICM plants report that lambs exceeding 25kg carcase weight will be subject to a price penalty of 30c/kg, with the plants also reporting that this will remain under review for carcases deemed overweight and overfat.
IFA sheep committee chair Sean Dennehy criticised what he described as a “short-sighted and opportunistic approach of factories in dropping lamb prices”.
“All of the market conditions that prevailed in the past year continue to underpin the trade - tight supplies, low volumes of New Zealand imports and good demand. Factories are overstepping the mark with price penalties on carcases they deem overweight.
“Orderly marketing of suitable lambs is critical to swing back control from factories and put sheep farmers in a position to maximise returns from the anticipated improvements in the market place over the coming weeks. Farmers should only move lambs as they become fit, while conscious of kill-outs.”
The ewe trade in contrast is steady with quotes of €3.20/kg and top prices ranging from €3.40/kg to €3.60/kg paid for large lots or to those handling high numbers.
Factories in Northern Ireland (NI) have also dropped quotes by 15p/kg to £5.45/kg or the equivalent of €6.55/kg. The number of sheep imported from NI for direct slaughter was almost 1,500 head higher at 6,024. This represents 11.5% of the sheep kill figure of 52,385.