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Marketing Campaign Helps to Support Prime Lamb Prices
Prime lamb prices have shown some firmness over the past week, rising by 7p/kg liveweight, after falling during the previous four weeks.
This took the average price back in line with prices during the same period in 2016, said Stuart Ashworth, Quality Meat Scotland’s Head of Economics Services.
The quality of lambs forward for sale has improved significantly on those forward two weeks ago, with the proportion of lambs falling in the 25 – 45 kg live weight range increasing last week.
“The fact that more than 75% of lambs have been falling into this weight range is helping to support the SQQ price,” said Mr Ashworth.
“The SQQ price quote is, however, heavily influenced by the demand for 39-40kg lambs which have recently sold at a significant premium of 8-9p kg lwt over lighter weight lambs and 3 -5p per kilo live weight over heavier lambs.”
As the number of lambs increase in this weight range the overall average price can rise while the price for this specification of lamb may not change as rapidly, observed Mr Ashworth.
However, in the past week the lift in average price for 39-40kg lambs has often been greater than that of the whole SQQ weight range.
“This would indicate firm demand in the wholesale market for lambs often described as ‘supermarket lambs’ suggesting QMS’s current Scotch Lamb PGI marketing campaign and the GB-wide Love Lamb Week promotions are having an impact on demand,” said Mr Ashworth.
The downturn in lamb numbers reaching the market is also helping to stimulate prices, he said, although the increase in price in the current week drew more lambs into auction rings as the week progressed, without putting a break on the price.
“The cause of the downturn in numbers is likely to have been a response to low farmgate prices over the past couple of weeks. Weather may have also had an influence by slowing growth rates which may have implications for supplies later in the season,” said Mr Ashworth.
June census data has been published for England, Northern Ireland and the Republic of Ireland and all the reports have one thing in common - an increase of around 2% in the number of lambs on farms in June 2017.
With the UK lamb slaughter figures between June and the end of August unchanged on last year and auction throughputs in September lower than last year there is a suggestion there may be a greater number of lambs remaining to be marketed than last year.
In contrast, he said, lamb marketings in the Republic of Ireland have been running more than 2% higher than last year since June.
“Meanwhile, in the main sheep meat export market of France, slaughterings of lambs have been lower than year-earlier levels in June, July and August,” stated Mr Ashworth.
“This created some opportunity for an increase in sheepmeat deliveries to France to cover the fall in French lamb numbers which the UK and Ireland were able to exploit.
“However, despite a slightly more favourable French demand, sterling currently trading around 5% stronger than it was a month ago will have had a steadying influence on farmgate prices.”
Beef and Lamb New Zealand have recently released their first assessment of the 2017/2018 lamb crop showing a potential growth in export volumes of 0.5%.
However, New Zealand has, observed Mr Ashworth, increasingly been finding markets other than Europe, and over the past year has increased shipments to North America and the Middle East and maintained volumes in North Asia while reducing shipments to the UK and EU.