There will be less sheep meat on the market in 2007, but that will not necessarily translate into higher prices for producers.
That was the verdict of Stuart Ashworth, senior business analyst with Quality Meat Scotland as he looked at trends emerging in the sheep meat market, at the MLC Outlook Conference.
He said this was despite the restructuring of flocks. "The UK has been losing sheep since 2000. The down-sizing of sheep flocks had been caused by a combination of factors, such as Foot & Mouth Disease and the reorganisation of the Common Agricultural Policy."
Prices, he said, "had derailed at the beginning of November" and that was not due solely to supply and demand. One of the contributing factors was the quality of lamb. "The ideal lamb for most buyers is R3L or better and, in November and December, we found that fat levels in lambs had increased. Producers think if they produce bigger, heavier animals, they will get more for them, but that is not necessarily the case."
Exports of sheep meat had a good spring, due to the UK's low prices, but there was a challenge in October and November, when they fell below the previous year's levels. Exports to France, a major importer of British lamb, fell by 28-30% due to the strength of the pound sterling. "If prices continue to go up, the downside is that the French won't eat so much lamb. If that happens, then the only other markets to which the UK can export sheep meat will be Germany and Italy."
Ashworth also remained unconvinced that, as supplies tightened, the British consumer would be willing to pay more for lamb.