In the 12 week period to mid-May the volume of sheepmeat sold by UK retailers grew by 21% year-on-year, according to the latest figures from market research company, Kantar Worldpanel.
The upsurge was the result of consumers being tempted by the 9.5% fall in the average retail price, reflecting lower farmgate prices at that time, observed Stuart Ashworth, Head of Economics Services, Quality Meat Scotland (QMS).
Hence, said Mr Ashworth, while the mainland European market for sheepmeat can be described as challenging, the domestic market has been more buoyant.
“Although the producer price for lamb has risen since May and currently stands about 10% ahead of last year, this is less than the 15% increase in the producer price for prime cattle and 12% increase for pigs,” said Mr Ashworth.
“Retailers should still be able to offer lamb at competitive prices compared to beef and pork and, with UK lamb supplies undoubtedly tighter than last year, producers should look forward, despite the normal seasonal slide in price, to continued firm prices for lamb,” he said.
As volumes pick up the usual seasonal decline in prices for prime lambs prices is now being witnessed. Across the UK and Europe prices have slipped by around 4% over the past month.
“Importantly, however, prices remain above last year’s levels by an average of 4% across Europe, while in sterling terms UK prices are over 10% higher than last year,” commented Mr Ashworth.
New season lambs have been slow to arrive on the UK market for well-documented reasons but the long tail-end of hoggs has kept the market well supplied with product. Between January and the end of April, GB abattoirs handled 363,000 more hoggs than last year.
“However, despite the hogg carryover into May increasing supplies from that source by more than 50%, provisional slaughter data for May suggests that lamb and hogg supply fell by around 5% when compared to last year because of the lack of new season lambs,” he said.
As June has progressed availability of new season lambs has improved. However, auction sales of new season lambs are still running around 25% lower than last year and even in mid-June there were still significant numbers of hoggs reaching the market.
Irish prime sheep numbers have followed a similar pattern to the UK. After abundant supplies in the first quarter of the year, Irish lamb supplies fell below year-earlier levels throughout May but are now matching last year’s levels.
Although UK and Irish supplies were higher in the first quarter of 2013, that was not the case across the principal sheepmeat producing countries of mainland Europe. France, Spain, Greece and Romania have all seen lower production over the first quarter of 2013 with little prospect of improvement in the coming months. There has, however, been some increase in Italy.
However, despite some opportunities in the European market, the UK exported less sheepmeat to France in the first four months of the year than the year previously, although it did grow trade in sheepmeat with Germany, Italy and the Netherlands. Overall, UK exports in the first four months of the year were little changed.
Although supplies of New Zealand lamb into the UK were well ahead of last year in the January to April period, their trade with other European customers has been more cautious.
New Zealand has instead being developing opportunities in China where the value of their exports in the first third of the year has more than doubled from last year. This New Zealand trade behaviour reflects the changed global demand for sheepmeat and in particular the challenges of the mainland European market compared with the growth potential of an increasingly prosperous China.