Factory agents have stepped up their purchasing activity since the start of the week and are more active both in sourcing lambs direct from farms or through mart sales.

Agents have more scope to negotiate on price, with returns at the higher end of the market increasing by 10c/kg.

Prices of €6.40/kg to €6.50/kg have been quoted at the top end of the market from sellers handling significant numbers and supplying lambs regularly. Higher carcase weight allowances to 22.5kg have also been offered in some cases.

This 10c/kg increase is not reflected in base quotes across the board. Only Kildare Chilling has moved on price, rising its base quote by 20c/kg to €6.20/kg plus its 10c/kg quality assurance bonus.

This is said to be frustrating producer groups working on a pricing structure of the average of quotes across a number of plants plus the respective group bonus.

Some groups have seen their price rise by 3c/kg to 5c/kg, with prices ranging from €6.30/kg to €6.45/kg depending on the deal in place.

These groups say they are not being rewarded for delivering lambs to a tight specification.

Sellers trading individually with small numbers have also seen a 5c/kg to 10c/kg differential open between plants, with prices ranging from €6.15/kg to €6.30/kg for quality assured lambs.

This week’s increase in price comes on the back of a strengthening of the trade in Britain. The Agriculture and Horticulture Development Board reports that the standard quality quotation (SQQ) liveweight lamb price is running 15p/kg to 18p/kg higher week on week to average north of £2.50/kg. This is the equivalent of €3/kg at 88p to the euro.

Price prospects

Industry sources in Ireland report that the 10p/kg to 20p/kg fall in British lamb prices in recent weeks (deadweight price of £5.12/kg or €5.80/kg) undermined the competitiveness of Irish lamb in key export markets and contributed to recent price pressure.

They say that the potential to increase price will be strongly influenced by trade dynamics in Britain.

The latest Bord Bia sheep price dashboard points to plenty of potential to return a higher margin to producers if this materialises.

The average lamb price reported in France at the start of the month was €8.00/kg, while the Spanish lamb price was €7.30/kg.

The British lamb price of €6/kg is 36c/kg lower than the corresponding week in 2021, while the Irish lamb price of €6.13/kg was 23c/kg lower year on year. This price is quoted exclusive of VAT (€6.47/kg).

This price hides the fact that at the start of November 2021, prices jumped by 30c/kg to 50c/kg, leaving quotes 60c/kg to 80c/kg higher and top prices above €7/kg.

The trade in Northern Ireland is unchanged. Plants are trying to open negotiations from a base quote of £5.00/kg (€5.68/kg), but regular sellers continue to secure returns ranging from £5.15/kg to £5.25/kg.