Scottish lamb prices regain ground following slump

Having fallen for the past four weeks, Scottish prime lamb prices have re-established themselves and risen to 7p/kg liveweight.

As a result, the average price has fallen back in line with the same period for last year. According to Stuart Ashworth, head of economics services for Quality Meat Scotland (QMS), lamb quality being brought forward has improved compared to as little as two weeks ago. The proportion of lambs falling in the 25-45kg liveweight range also increased compared to last week.

“The fact that more than 75% of lambs have been falling into this weight range is helping to support the SQQ [Standard Quality Quotation] price,” explained 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/kilo lightweight (kg lwt) over lighter weight lambs and 3-5p/kg lwt over heavier lambs.”

Although the number of lambs increased in this weight range, the overall average price has also risen, but the price for the specification of lamb may not change as rapidly.

Meanwhile, the lift in average prices for 39-40kg lambs over the past week has often been greater than the whole SQQ weight range, said Ashworth.

“This would indicate firm demand in the wholesale market for lambs, often described as ‘supermarket lambs’, suggesting QMS’ current Scotch Lamb PGI marketing campaign and the GB-wide Love Lamb Week promotions are having an impact on demand,” he commented.

Prices are also being boosted by the downturn in numbers reaching the market. Ashworth explained: “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.”

Data reports covering England, Northern Ireland and the Republic of Ireland all indicate that the number of lambs on farms in June 2017 has increased by around 2%.

UK slaughter numbers between June and August remained the same as last year, with throughputs in September lower than 2016, indicating that there could be extra lambs remaining on the market compared to the year previous.

Juxtaposing this, figures for the Republic of Ireland have been running more than 2% since June last year.

“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,” Ashworth commented.

“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.”

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