Lamb producers’ shares decline in July

Retail prices for lamb remained steady in July, but producers’ shares fell during the month. 

According to the latest AHDB Beef & Lamb intelligence, sheep meat producers’ share dropped by just under five percentage points to 56% compared to June. Although higher than the same month in 2016, it signifies a month-on-month decline.

This pattern is typical of this time of year, with farmgate prices showing a seasonal decline against a steadiness in retail prices. Farmgate prices in July saw a 7% month-on-month drop.

On the beef side, producers’ share of the retail price rose by one percentage point to 53% in July, resulting in producers’ share being five points ahead of July 2016.

The average farmgate price for beef rose by 2% during July, while retail prices recorded a fall of just below half a percentage point.

Kantar Worldpanel data for the 12 weeks to 16 July revealed that lamb consumption continued to decline, with value sales dropping 6.1% year-on-year over the period. Volume sales dropped 8.3%. Beef sales were also under pressure in retail, declining 2.3% in value terms and 5.5% in volume terms. A drop in promotions has been identified as the cause of these declines. The only growth was in added-value products, such as burgers and grills, which saw a 2.2% value sales and a 0.8% volume sales rise.

Looking ahead, farmgate prices for lamb have been aided by tighter supplies of imported lamb, but as the sheep meat production season starts, pressure is expected to be put on prices. AHDB Beef & Lamb believes the potential for further BBQ weather in the UK and strong current Asian demand for manufacturing beef may help support farmgate prices in the short-term.

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