The recent publication of the Welsh June agricultural census reveals a surprising increase in lamb numbers in Wales and, as a result, the revised UK lamb crop for 2013 shows an increase of 1%, although lamb numbers fell by 5% in Scotland and 3% in Northern Ireland.
According to Stuart Ashworth, QMS Head of Economics Services, closer examination suggests a lower performance per ewe but a larger ewe flock in Wales, resulting in an overall increase in lamb numbers. “Although lambs were slow to reach the market in June and July, slaughter volumes picked up through September and October,” said Mr Ashworth.
By the end of October, 200,000 more lambs had been slaughtered in the UK between June and October than last year.
“This means that, in broad terms, at the end of October there were the same number of lambs left in the supply chain this year as last year.” Auction market sales through November have been running around 8% higher than last year and, on balance, the UK is likely to enter 2014 with a smaller carryover of hoggs than last year. “It is likely that mortality rates among lambs will have been lower this year than last year,” said Mr Ashworth.
“Although the headline figure may be for fewer hoggs carried into 2014, in practice, the shortfall may not be as large as first thought because of this lower mortality.”
Notwithstanding the higher volume of lambs currently on the market, producer prices are 12% higher than last year due to a higher quality of lambs and strengthening consumer interest in lamb. However, producer prices are 12% lower than two years ago.
Nevertheless, according to Mr Ashworth, over the past month and after the Islamic New Year, producer prices have steadied and been slow to rise in the run up to Christmas.
In Ireland, lamb slaughterings have been running slightly ahead of last year. “Between June and early November they have slaughtered 2% more lambs than last year and they, too, will have fewer hoggs in the new year given the lower lamb crop reported in the June census,” commented Mr Ashworth. “ In contrast, lamb production in France continues to decline and imports of sheep meat have been rising.
Indeed, UK exports to France increased by 5% in September.” Lamb prices across Europe are generally around 4% higher than last year and have been slowly increasing over the past month. The most notable exception is Spain where prices are 10% lower than last year. Meanwhile, the New Zealand lamb season has started strongly with slaughterings running 10% higher than last year over September and October.
This is set against an expectation that their lamb crop is smaller than last year with producer prices around 10% higher.
The chief executive of Silver Fern Farms, one of the largest lamb processors in New Zealand, has recently issued a word of caution. He said that although there is a very high likelihood that prices will be higher than last year at the peak selling period of January to March, NZ prices cannot reach the levels of 2011 or their export market gains, particularly to China, will be quickly lost as New Zealand lamb would become too expensive for consumers.
