The dramatic drop has come as a result of a number of factors, including around 30 per cent extra lambs coming to market from one week compared to the next as farmers looked to shift animals off farm as the hot weather impacted availability of grass for feed. The effect was compounded by a drop in demand as the sunshine saw consumers less likely to buy lamb roasting joints and the start of Ramadan, where purchases among the Muslim community dip significantly.
EBLEX is reassuring farmers that there has been no dramatic change in the dynamics of the market, which has been depressed by a number of short term factors, and they should stick to an orderly marketing strategy as the price recovers.
“This has been an incredibly big drop but the drivers for it are fairly clear and understandable. We would expect the market to calm down,” said John Cross, EBLEX chairman and Norfolk sheep farmer, who discussed the current market conditions with EBLEX board members at a meeting in Birmingham yesterday.
“A number of factors conspired to make it happen but producers need to have clear marketing strategies and stick to them. With so many lambs coming forward at the same time, it is inevitable it will negatively affect the market price. Marketing of the stock must be done in a careful, informed way.”
Among the pointers EBLEX suggests are:
• Do not sell under-finished stock
• Check what the market is doing via the latest prices on the EBLEX website
• Set a reserve price, where appropriate, and do not feel obliged to sell if that mark is not met at market
• Take the advice of graders if your local market has one.
Steve Powdrill, EBLEX’s national selection specialist, said: “It is vital to draft your lambs correctly and make sure that they are at their optimal in order to maximise your return. It is also important that producers know what is required of them, as such I would advise that they attend one of EBLEX’s Live to dead marketing days available for free through the Better Returns Programme.
“There are also a host of other resources available via BRP on getting best returns from marketing lambs at the right time.”
EBLEX investment in knowledge transfer sessions last year saw more than 130 events organised with a selection message. It has also continued to invest in opening additional non-EU export markets to find new outlets for domestically produced sheep meat, which has helped underpin the lamb price significantly over the last two years. It also continues to investigate new ways to market lamb, including looking at BBQ cuts.
“Our expectation is that the lamb crop for this year will be down, which will lead ultimately to a contraction of numbers and more robust prices, and we are already seeing fewer lambs at markets this week,” added John.
“However, if there is a sudden surge in lambs coming forward, it will adversely affect market prices. We expect the prices to come back. Eid – the festival marking the end of the month-long Ramadan – will bring a recovery in sales to the Muslim community and we would expect the retailers to respond to this barbecue weather if it continues, marketing more appropriate lamb cuts.
“In addition, the export market, affected by short supply and holidays in some of our important European markets, will also pick up.”
Lamb liveweight prices (GB NSL SQQ) fell from 230.1p/kg on Thursday 11 July to 172.1p/kg by Thursday 18 July. This was the result of a surge in lambs entering the market coupled with demand being weakened, mainly due to the hot weather. With numbers falling by approximately 40%, in response to the falling trade, prices between Monday and Wednesday (22nd -24th July) levelled and tracked between 172.1p/kg and 178.1p/kg.
The EBLEX website reports prices for almost all GB auctions marts with most reports being available by 6pm on the day of sale. In addition we also publish free-of-charge publications on a weekly and monthly basis providing insight into the lamb (and cattle) market.
In addition, the website holds a library of literature on handling and stock selection for better returns.
All can be accessed via www.eblex.org.uk