Agribusiness News November 2022 – Sheep

Trade Talk

The lamb finished price has held extremely well over the last month.  A lot of happened financially in the UK over this period including the pound being at a record low against the dollar (£1 = $1.035 on 26/09/22).  With a weak pound, our exports are favourable for our European customers, while anything we are importing has been at a premium.

We have a tight domestic supply, with AHDB figures showing the production of UK sheep meat in September being 11% lower than 2021.  This is driven from the drought in the summer impacting lamb growth, as well as the additional bank holiday for the Queen’s funeral impacting the kill pattern for the month.  Combined with this low supply and high demand from the EU for lamb.  With low supply and high demand, we have the perfect combination to sustain current high prices throughout the winter.

Cull ewes

Cull ewe prices have weakened over the last month, as supply has increased with pre tupping MOTs on late and hill lambing flocks.  Strong continental types are still well in demand.  As we approach tupping, the supply will shorten, which will aid a price rise in culls.

 Store Lambs

Looking at store sales, light lambs are showing the largest change year on year largely due to the high price of feed and low supplies of forage in some areas.

On the week 15/10/22 medium lambs averaged £2.33/kg and heavy lambs averaged £2.27/kg, showing these medium to short keep lambs are favoured over the long keep lamb which will carry higher variable costs over the finishing period.

European Lamb

Deadweight prices have remained at a premium in Europe with French lamb at €7.97/kg DW and Spanish lamb at €7.22/kg DW (w/e/ 01/10/22 – data from Bord Bia).  In comparison for the same week UK lamb was at €6.01/kg DW (note euro).

Despite the French/UK price differentials, the French consumer has a great sense of patriotism, and sense to support their local markets.  There is a perception of quality coming from their own particular province or regional area, which assists in keeping the price at a premium.  In addition, there is a high population of Muslims in France.  Muslim people generally eat a high volume of sheep meat, with it being the principle chosen meat for religious festivals, such as Ramadan, Eid-al- Fitr and Eid-al-Adha, as well as other family gatherings.

 New Zealand and Australian Lamb

NZ lamb has held well in deadweight price with €5.72/kg (w/e/ 01/10/22), while Australian lamb was at €5.06/kg.  The high price of the NZ lamb reduces the appeal from the EU to import it, channelling the product to closer countries, reducing cost with transport.  The Australian lamb is lower in price due to a higher supply of lamb this year.  Following the growth in the national flock after the drought reduced the flock.

Kirsten Williams; 07798617293