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Increased supply hits lamb prices

The normal seasonal increase in the number of lambs reaching market is being swelled by an influx of lambs which were slow to fatten due to poor weather during the summer.

As a result the prices that are now being achieved by farmers is being hit, according to Hybu Cig Cymru – Meat Promotion Wales.

“There are many factors that influence the actual level of lamb returns, including exchange rates and the lower value of offal and skins known as the fifth quarter,” said John Richards, HCC’s Industry Information Officer.

“But it is the increased supply that has been experienced over the last few weeks that has had the major impact on the recent lamb price decline.”

During the week ending September 22nd, the lamb liveweight price at Welsh livestock markets was 161p per kg, below the equivalent figure for 2011 for the first time since the beginning of August. By the following week the price had dropped again to 153.8p per kg.

“The unpredictability of the price comes off the back of extremely difficult finishing conditions from spring onwards,” said Mr Richards. “With significantly reduced numbers of lambs coming forward across Britain, prices have fluctuated considerably.

“As a result the seasonal decline that we usually see in June, July and early August failed to materialise as tight supplies kept prices reasonably buoyant.”

Statistics issued by Defra showed that total sheep throughput figures at Welsh abattoirs were down by 13 per cent in June, down 28 per cent in July and down 13 per cent in August.

“Since the start of September it has been reported that lamb finishing has picked up and an increased number of lambs have started to come through the system,” said Mr Richards.

“This has had the effect of relieving much of the pressure on the system and prices now appear to be undergoing the seasonal decline that would normally be expected earlier in the year,” he said. “It is only in September that the number of new season lambs passing through abattoirs is estimated to have tracked above year-on-year levels.”

With weekly supplies now hitting their highest point of the year to date, the average Welsh liveweight lamb price reached its lowest point in the week ending September 29th. In contrast, prices were at their highest when supply was low during May and early June.

“While the weather remains variable, the number of lambs coming forward appears to remain strong,” said Mr Richards.

“A census undertaken in England indicated there were more lambs on the ground in June, and a similar result is expected in Wales when our census is published in November.

“This has led to the expectation that there are an increased number of lambs waiting to be processed at our abattoirs.”

Further information is contained in HCC’s monthly market Bulletin, which can be found on the HCC website, www.hccmpw.org.uk