The sheep trade has exploded into life since the end of last week.
Factory agents increased base quotes by 10c/kg on Friday, leaving base quotes ranging from €6.60/kg to €6.80/kg and top prices hitting €7/kg to €7.10/kg for lambs slaughtered on Monday.
However, this was shortlived, with supplies coming on stream being extremely tight and forcing factories to move quotes up by another 10c/kg on Monday.
This moved quotes to €6.75/kg to €6.90/kg, excluding quality assurance bonus payments.
The increase in quotes and payment mechanism which many producer groups operate with saw farmgate returns range from €7.15/kg to €7.25/kg, with prices steadying at this level since. Specialist finishers are also trading at a similar level, with top prices reported at €7.30/kg.
Factories are reluctant to move beyond a carcase weight limit of 22.5kg, with only isolated deals reported in factories. A higher carcase weight limit of 23kg is on offer in some wholesale-orientated plants, but this is typically at a lower price point.
Sellers with lower negotiating power were offered prices of €6.80/kg to €6.85/kg at the start of the week, but there are very few lambs now trading below a price of €6.90/kg, with infrequent sellers with a significant number of lambs pushing returns to €7.00/kg to €7.10/kg.
Producers should be mindful of the variation in price between and even within factories and weigh up the optimum outlet. This is a more attractive proposition this week, with factory agents clashing ringside and underpinning a significant increase in prices paid for factory-fit lambs.
The increase in price is having the desired effect of attracting higher numbers forward, with last week’s sheep kill recorded at 57,680 head.
This is an increase of 5,852 on the corresponding week in 2020 and is still not in a position to satisfy the high level of demand currently in the marketplace (see page 41 for more on this).
Prices in Northern Ireland have also surged upwards, with base quotes jumping by 30p/kg to 35p/kg to £5.50/kg to £5.55/kg.
This is the equivalent of €6.44/kg to €6.50/kg at an exchange rate of 85.4p to the euro. Top prices are hitting £5.70/kg (€6.67/kg), with the mart trade moving ahead of the factory trade in places.
This is being influenced by strong demand from agents purchasing on behalf of southern plants. The number of sheep imported south last week for direct slaughter was recorded at over 8,500 head. Meanwhile, prices in Britain have moved above £6.00/kg as the week has progressed.