Increased supply contributes to seasonal fall in lamb prices

Increased supply contributes to seasonal fall in lamb prices

The reduction in lamb prices in recent weeks is as a result of a greater number of lambs coming onto the market earlier than usual and the strength of Sterling against the Euro, according to Hybu Cig Cymru – Meat Promotion Wales.

Since the beginning of June, auction markets in Wales and England have handled 20% more lambs than during the same period last year.

John Richards, HCC’s Industry Information Executive, said that while lamb prices at this time in 2013 were exceptionally strong, the fall in this year’s price was a cause for concern.

Having said that it did follow the seasonal trend, however, as more lambs entered the market during this period.

“When comparing lamb prices this year against exactly the same period last year, there is a difference,” he said. “But it should be noted that the conditions experienced during the spring of 2013 meant that there were fewer lambs available at this time last year.

“This year, thanks to a good lambing season and mild weather, there is a significant increase in the number of lambs now reaching the market,” he said. “It must also be borne in mind that lambs are entering the market earlier this year, extending the season.

“It means that the traditional seasonal trend has occurred a few weeks earlier in 2014 than usual.”

Another factor is the strength of the pound against the Euro. While one Euro is currently worth about 79p, last year it was worth 86p-87p.

“This reinforces HCC’s strategy of looking for other markets around the world so that we are not entirely dependent on one currency for our export trade,” said Mr Richards. “We are already exporting Welsh Lamb to the Middle and Far East as well as Scandinavia and Canada, while working to gain entry into new markets including China and the United States.”

“While one of the biggest influences on returns in the short term is likely to be exchange rates, HCC’s market research has shown that consumer confidence and recognition of the PGI Welsh Lamb brand in the UK is strong and that consumption of Welsh Lamb remains sound.

“This is the message we are passing on to retailers to encourage them to continue and enhance their support for our produce.”

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