Prime lambs are currently trading around 10% higher than at this time last year.
Despite the seasonal increase in the number of lambs reaching the market, the promotional body, Quality Meat Scotland says farm gate prices for prime lambs are remaining firm and that situation is being reflected across Europe.
QMS economist Stuart Ashworth said the French producer price is 13% higher than a year ago, in Spain it is 14% higher and in Ireland 1% up on the year.
“In contrast, the price for light lambs, defined as carcases of less than 12.5 kg, is struggling to match last year’s levels in the two main lamb-producing regions. It is 9% lower in Greece and 6% lower in Spain although light lambs are selling well in Italy and Croatia,” he said.
Mr Ashworth said prices were up despite modest increases in the volume of new season lambs reaching UK abattoirs compared to this time last year. In England the weekly kill during June reported by Defra was 3% higher than in 2016.
“The current price behaviour we are seeing suggests a degree of positivity from the demand side of the equation, perhaps coupled with reduced supplies from outside the UK,” he said.
Lamb imports from New Zealand to the UK and Europe are lower than this time last year and over the past six months New Zealand reports around 20% less sheepmeat dispatched to Great Britain.
Mr Ashworth said: “On the basis of a 20kg lamb carcase, this shortfall in volume could amount to the equivalent of around 5% of the UK weekly production at this time of year.”
New Zealand deliveries into the mainland European market are also falling short of last year, a situation which QMS suggests could lead to export opportunities for UK abattoirs. Exchange rates also make UK lamb competitive in European markets.
“The net effect of these trade patterns and opportunities is to boost competition in the market place and support price,” said Mr Ashworth.
However, headed that one consequence of the current market situation is that the volume of lamb on the home market has declined but the level of self-sufficiency has increased. Overall consumption has also declined and the retail price of some cuts has gone up.
nnicolson@thecourier.co.uk