Across most of Europe the volume of prime new season lambs reaching the market climbs steeply during June and market prices decline to reflect the increased supply. This year is no exception, Scottish auction markets for example have seen the volume of lambs sold each week increase almost threefold over the past month. This is according to the latest market commentary from Quality Meat Scotland (QMS).
Stuart Ashworth, QMS Chief Economist, observed that although both Scottish and GB auction markets have grown in volume, they are not matching the same throughput handled in June 2020.
“This tighter supply has helped to limit the slide in prices in early June but the current week shows a rapid downward movement in farmgate prices in Scotland as auction sales moved ahead of last year’s level for the first time,” said Mr Ashworth.
Prices in other major EU sheepmeat producing countries had drifted lower by 4-5% between mid May and the second week of June, while GB prices expressed in Euro had remained broadly unchanged.
Nevertheless, despite sliding over the past few week’s prices in the major sheepmeat producing countries of Europe, with the exception of Italy, remain higher than last year. The market is particularly firm in Ireland and Great Britain where for the week ending 12 June prices were respectively 33% and 40% higher than the same week last year in Euro.
“The fall in provisional Scottish price for the current week would still leave the current price some 38% higher than a year ago with more recent sales this week 33% higher than the same day last year.
“A more modest 10% increase on last year in France has resulted in an exceptional situation where both Irish and GB farmgate prices are higher than in France. Equally, the similarity of price with France would suggest that export activity is not the main driver of the GB price in the short term,” said Mr Ashworth.
New Zealand prime lamb prices which had been tracking the five-year average, and well below last year’s levels for most of their current lamb crop year, have climbed steeply above year earlier levels during April. Prices continued to climb and currently stand 13-15% higher than last year in local currency and sterling.
“New Zealand lamb slaughterings, between October and April, were higher than year earlier levels. With Beef + Lamb New Zealand, the country’s red meat levy body, expecting a lower export kill in 2020-21 than 2019-20, it is likely that some of the strength in New Zealand is due to lower year on year slaughterings in recent weeks. Firm demand in China and Pacific Rim countries will also be supporting New Zealand prices. Despite a shortage of shipping containers Beef + Lamb New Zealand report growth of 5% in exports during February, March and April, but not to Europe,” said Mr Ashworth.
In contrast Australian prime lamb producers are receiving prices around 10% lower than this time last year, although by historic standards they remain firm, despite slaughterings being reduced as farmers continue to rebuild flocks after the heavy slaughterings of breeding stock due to drought conditions of 2018 and into 2019.
“Meat and Livestock Australia expect the Australian sheep flock to grow by more than 15% over the next couple of years leading to a growth of 20 to 25% in export volumes of sheepmeat.
“Average Australian lamb carcase weights, reported by Meat and livestock Australia to be approaching 24 kg are much higher than in New Zealand and the UK where the average carcase weight is 20 kg. This would make Austalian carcases less attractive to the UK and European market. Having access to a market does not necessarily mean that you can easily supply that market,” concluded Mr Ashworth.