Key opportunities analysed in lamb market
Two key areas of opportunity have been identified in the lamb sector – consolidation and growth in the domestic market, following recent gains there, and maximising export opportunities.
Stuart Asworth, head of economics services with Quality Meat Scotland (QMS), has suggested that markets such as Denmark and Sweden offer real opportunities and QMS is working hard to develop these markets, including attending the Gastronord trade fair in Stockholm recently.
Ashworth explained: “Looking at the current market situation for lamb, a real challenge lies in export activity where trading has been difficult despite the attraction of current exchange rates. Exporting lamb to Europe and France in particular has been challenging over the past six months.”
He continued to explain that it’s not just a British problem, and French trade data showed French imports have been lower than last year throughout October to January.
Stuart Ashworth, Quality Meat Scotland.
“Both the UK and Ireland supplied less lamb to France in this period,” Ashworth continued. “Some of this loss was taken up by increased supplies to France from New Zealand between October and December, but New Zealand shipped less lamb to France in January.
“Furthermore, on the evidence of French data, sheepmeat consumption in France has been falling steadily for a number of years, with consumption in January down 3% compared with a year earlier.”
However, he said, some of the more northern European counties are seeing more stable demand.
“Indeed during February, Germany, Denmark, Belgium and the Netherlands all took slightly more sheepmeat from the UK than they did last year, though currently not sufficient to offset the fall in volumes to France and Italy,” he commented.
Judging by recent prices, it’s clear that as the 2015 lamb crop year draws to a close and Easter has passed, prime hogg prices have come under pressure.
“It is not unusual for prime hogg prices to come under pressure at the conclusion of the lamb crop year and the fall in prices during the past week, although substantial, has not been as dramatic as last year. In the current week prime hogg prices are only 1-2% lower than last year,” he observed.
This compares with earlier in 2016 when the price was 405% lower than last year.
However, a decline has shown in auction market and abattoir throughputs over the past month, in comparison to last year, in both the volume of SQQ hogs and total number of hogs marketed.
Ashworth continued: “The audition throughout has shown a higher proportion of SQQ hoggs in the total slaughter hogg marketing’s compared with last year, up until the past week.
“Similarly, until the past couple of weeks, the proportion of hoggs slaughtered in price-reporting abattoirs which had met the preferred R3L or better grading had been running higher than last year.”
This evidence shows that quality has been good since the turn of the year, although it has slipped a little in more recent weeks.
“Carcase weights have not been an issue either, as they have been lower than last year since January and the volume of domestic prime sheepmeat on the market has been lower than last year. Indeed total domestic sheepmeat production, including cull stock, is slightly down on the year over the first quarter,” concluded Ashworth.
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