Prime sheep prices remain 5% higher than a year ago, however prices have dipped slightly since the turn of the year, according to the latest market analysis by Quality Meat Scotland (QMS).
Comparing the prime sheep kill in the six months from June to December 2018, it shows a decline of 5% on the same period in 2017, which is broadly the same as the size of the fall in the lamb crop reported in the June 2018 UK census.
“However, early sales this week show some modest rebound in farmgate prices,” said Stuart Ashworth, director of Economics Services.
Ashworth also reports that European prices are showing some firmness, sitting around 2.5% higher than last year.
Consequently, the proportion of lambs sold before the turn of the year is broadly the same as last year.
“The conclusion is that the number of hoggs being carried forward into 2019 is 3-4% lower than last year which, in itself, and everything else being equal, will support farmgate prices,” commented Ashworth.
Lower lamb throughputs have been accompanied by slightly higher carcase weights, and sheepmeat production has also been affected by changes in ewe slaughtering.
“There has also been a sizeable increase of 5% in ewe and ram slaughterings, which means that the volume of sheepmeat produced in the UK in the second half of 2018 declined by 3.5%,” said Ashworth.
Sheepskin prices have, however, come under pressure in the second half of 2018 offsetting some of the strength in the meat market.
Additionally, the strengthening of sterling in the past week will also, in the short-term, squeeze export competitiveness.
“Although the second quarter of the year (April to June) is usually the quarter with lowest dependence on exports, they still account for 30% of production.
“If this trade is disrupted, or has to face tariff barriers, prices will inevitably come under pressure,” concluded Ashworth.
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
