European markets targeted as New Zealand imports fall short

Abattoirs have been told to target European markets for sheep exports, as competition from New Zealand fell short last year. 

Quality Meat Scotland (QMS) cited UK export statistics for this year up until the end of April 2017, as indicating growth in export volumes to the continent when compared with last year. This was assisted by the exchange rates for UK lamb.

“The net effect of these trade patterns and opportunities is to boost competition in the marketplace and support price,” said Stuart Ashworth (pictured), QMS’ head of economics services.

Whilst there are opportunities abroad, the home market has faced challenges as the volume of lamb has declined, representing a fall in overall consumption, The retail price of some cuts has also gone up.

“The volume of domestic lambs available on the market typically builds towards autumn with the UK weekly kill usually peaking in September or October when it is often 25% higher than the weekly kill in June,” commented Ashworth.

“This is the point where there is typically the greatest seasonal downard pressure on farmgate prices. However, the weakness of sterling and low production in mainland Europe and New Zealand point to export opportunities which could, to some extent, mitigate the seasonal price fall this year.”

Although there is an increase in the number of lambs reaching the market, QMS highlighted that prices were still performing well. Prime lambs are currently trading around 10% higher than last year.

“This relative firmness in price is being reflected across Europe in the countries producing heavy lambs,” explained Ashworth.

“The French producer price is 13% higher than a year ago, the Spanish price is 14% higher and the Irish price one percent higher. In contrast, the price for light lambs, defined as carcases of less than 12.5kg, is struggling to match last year’s levels in the two main lamb-producing regions, It is 9% lower in Greece and 6% lower in Spain, although light lambs are selling well in Italy and Croatia.”

Ashworth observed that prices were holding their own despite volumes of new-season lamb experiencing an increase when compared to last year. QMS said that figures from Defra showed the weekly kill during June was 3% higher than in 2016.

Ashworth said: “The current price behaviour we are seeing suggests a degree of positivity from the demand side of the equation, perhaps coupled with reduced supplies from outside the UK.”

Ireland is also experiencing similar fortunes, with new-season lamb running higher than last year. Producer prices for the country have also seen prices holding similar to 2016. Meanwhile, in France, price movements represented a lower domestic supply. French slaughterings during May were 2% lower than they were last year, while ewe population numbers for December last year were down by 1.5%.

“Deliveries from New Zealand to the UK and Europe are also running lower than year-earlier levels,” continued Ashworth.

“Over the past six months New Zealand reports around 20% less sheepmeat dispatched to Great Britain. On the basis of a 20kg lamb carcase, this shortfall in volume could amount to the equivalent of around 5% of the UK weekly production at this time of year.”

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