Lamb prices on a rollercoaster ride

Now, with the Muslim holy month of Ramadan starting next Friday, there is some prospect of demand remaining reasonable in the short term, according to Stuart Ashworth, Quality Meat Scotland’s marketing guru.

“A number of elements are influencing the market,” he said. “New season lambs have been slow to arrive, perhaps not surprising given the impact of poor weather on growth rates.

“However, by the end of June the numbers coming forward were slightly ahead of last year and although auction volumes dipped in early July the total lamb kill remains slightly ahead of last year.”

Ashworth said that it looked as if the weather had taken its toll on lamb quality with the proportion of lambs hitting the top grades being a couple of percentage points lower than last year.

On quantity, he described the UK market as being “relatively well supplied” with lambs as was also the case in Ireland.

Looking to Europe where approximately one-third of all UK lamb ends up, he said there were reports of more plentiful supplies of Spanish and Portuguese lambs on the French market.

“So not only is the UK market reasonably well-supplied with lamb, so too is our main export market. French producers are currently receiving 2.5 per cent less than they did last year while Spanish producers are getting 4-5 per cent less.”

Even before sterling exchange rates come into the equation, these figures are making the export market much tougher.

A further complication on the lamb market this year has been the influence of skin values which, said Ashworth, had taken a tumble over the past quarter.

“Sheepskin prices have fallen globally and while Scottish sheepskin prices may not have fallen the 60 per cent reported in Australia, they are certainly well below year earlier levels,” he said.

The surprising part of the latest batch of lamb marketing statistics is the modest improvement in consumer demand. Although over the past year household purchases of lamb have fallen in volume terms, Ashworth said data for the most recent four weeks into early June showed a modest increase in volume.

“All of that increase was the result of increased purchases of leg roasts which may reflect weather conditions or some heavy discounting to clear the market, but it is a start,” he said.

“Lamb may remain expensive but its relative price position against beef has improved. The challenge for the industry is to build on this modest improvement in consumer demand so as to sustain producer prices.”