Farmers suffer as the price of lamb falls

Latest figures from the Agriculture & Horticulture Development Board (AHDB) have shown that consumer lamb prices have fallen this spring from the spring of 2014. However, farmers share of the retail price has fallen from 60% to 50% within the same timeframe.

In the month of May 2013, farmers were receiving close to 65% of the retail price. A year later this has dropped to just below 60%. This year, the returns have fallen to 50%.

The farmgate price of lamb is reaching critically low levels this spring, said National Farmers Union (NFU) livestock board chairman Charles Sercombe. Farmers know that markets are more volatile than they have ever been, but they will be galled to see that, while their share of the retail price is falling, that fall-off is not being fully reflected in the price on the shelves.

Everyone in the supply chain needs to make a sustainable margin, but it looks like both ends of this supply chain farmers and consumers are getting a raw deal at the moment. It begs the question whos profiting from lamb?

The graph below, created by AHDB, compares the retail price of lamb received by farmers over the past two years.

AHDB farmer lamb prices

Sercombe claimed that the demand for lamb was continuously falling, but suggested that by calling retailers to give British lamb pride of place on their shelves, this decline could be turned around.

We also call on the industry to develop risk management tools that can help farmers to deal with the volatile markets that are causing such uncertainty. Farmers need these tools to help them to plan and invest for the long-term, continued Sercombe.

Ive recently put four key asks at the door of retailers, and this weeks latest figures make those asks more critical than ever. We want a fair deal for farmers, and a fair deal for consumers, so my call to retailers is to act now and deliver that fair deal.

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