UK sheepmeat market cools as Brexit uncertainty continues

UK sheepmeat market cools as Brexit uncertainty continues

UK prime sheep prices have fallen by 4% over the past month to currently stand 14% lower than a year ago, according to the latest market analysis by Quality Meat Scotland (QMS).

Stuart Ashworth, QMS head of economic services.

Stuart Ashworth, QMS director of Economics Services explained: “The level change on last year is partly influenced by the price movements at this time last year when prime sheep prices were rising steeply across Europe, something that has not occurred this year.”

He reported that most European producers have also seen a reduction in prices over the past month, leading to prices lower than a year ago, although to a lesser extent than in the UK.

Irish prices have also cooled 4% over the past month but are only marginally lower than a year ago.

The fall in prices across UK and Ireland has occurred while the number of prime sheep reaching abattoirs has fallen.

“The weekly lamb kill in the UK during January was 7% lower than last year and has continued to be lower into February,” said Ashworth.

“Similarly, in Ireland since the turn of the year, abattoir throughputs have averaged 11% lower than last year with an even bigger decline in recent weeks.” He added.

Slaughter rates for other European countries have seen the opposite.

“In contrast to the UK and Ireland, France reported an increase in domestic slaughtering’s during December and January. Spain also reported an increase in sheep slaughtering’s during December.

“Although increased supplies in France and Spain would encourage lower producer prices there, lower supplies and lower prices in the UK and Ireland would point towards sluggish demand for British and Irish sheepmeat, rather than oversupply.

“France also reported lower sheepmeat consumption during December and for the whole of 2018.” He said.

UK sheepmeat consumption

The latest analysis by Kantar Worldpanel shows that in the most recent month, UK sheepmeat consumption has been similar to the levels of a year ago, but there has been some increase in the average retail price.

Despite lower production, lower levels of trade will result in plenty of lamb on the home market to sustain domestic demand volumes. However, as Easter falls three weeks later this year, demand will likely be pushed back to April in 2019 compared to March last year.

Beef and lamb New Zealand put some of the decline in its exports to the UK and the EU down to poorer economic performance in the European market, and an increase in demand from the Chinese and US markets.

Ashworth pointed out that Brexit confusion is adding to the uncertainty in the market place.

“Uncertainty over the terms of trade for this level of production will inevitably lead to extreme caution among sheep buyers,” he concluded.

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