Agribusiness News July 2024 – Sheep

Wool trade

As shearing gets well under way across the country, it is always interesting to follow the global wool trade.  Wool is currently trading similar to last year, with Merino remaining the premium in the market.  The Australian price has shown the greatest increase; however, this had fallen -10ac/kg in the month.

Figure 1: Global wool prices

Source: Australian Wool Innovation Ltd

Numbers on the ground

The highs of trading 2023 hoggs and 2024 early season lambs has been exceptional.  Revised statistics, using slaughter figures have shown the 2023 lambs carried over to 2024 was 280,000 head or 6.5% less than the previous year.  This carry over will contain an element of breeding hoggs that were cashed in on the premium prime market, showing the decline of lambs could have been more severe.

Looking towards the current 2024 crop of lambs, DEFRA has estimated the crop to stand at 15.9 million head, a reduction of 185,000 or 1.2% on 2023.  The reason for this decline has been due to the reduced national flock, disease such as bluetongue and Schmallenburg, poor weather in April and the potential sale of ewe hoggs.

With less lambs on the ground, and early lambing flocks being impacted by bluetongue (see Management Matters article) and Schmallenburg, AHDB have predicted there to be 235,000 head fewer lambs forward for slaughter in the first 6 months of the year (Jan-June) at 1.42 million head.  For July to December it is predicted an increase of 1% (48,000 head), to a total of 6.4 million forward for slaughter.

Festival demand

The key religious festivals have driven great demand for lamb and mutton over the last months.  With these now passed, it is predicted the typical seasonal slip in price will occur.  This will be combined with supply increasing over the summer.  However, with fewer lambs on the ground, it is thought the price will remain above previous years.  The export market remains strong into our largest market – Europe.  However, our price point remains above France and Spain and over double the Australian and New Zealand price.

Figure 2: Deadweight prices across Europe

Source: BordBia for week ending 15/06/2024

In quarter 1 (Jan-March) we have had an increase in imports from Australia and NZ due to low domestic production, Easter and a competitive market.  It is unlikely that this will be sustained for the rest of the year, with the NZ flock decreasing and Australia aiming for markets closer to home e.g. USA, China and Middle East.

Lamb is seen as a premium choice for the shopper but it does prove as a popular option when dining out e.g. curries, kebabs, etc.  Supermarket offers and deals have shown great success for lamb over the year.  One example of this is leg roasting joints show a price decrease in the shops over the last year of -5.8% but the year-on-year volume shows a 19.8% increase.  Cheaper cuts such as mince (average £9.58/kg May 23-24) have shown an increased volume of 3.5%, while increasing in value by 2.6%.  Ensuring the consumer knows how to make tasty mid-week cost effective meals will be a real driver for lamb sales going forward.

Kirsten Williams, kirsten.williams@sac.co.uk, 07798617293

Deadweight prices may be provisional. Auction price reporting week is slightly different to the deadweight week. Source: AHDB and IAAS Standard weight 32.1 – 39.0kg; Medium weight 39.1 – 45.5kg; Heavy 45.6 – 52.0kg

Note: From 11^th May, prices transition to new season lambs