The lamb market has risen additional after a agency finish to 2023, reaching file ranges for the time of yr, High quality Meat Scotland (QMS) says in new evaluation.
This month, hoggs have averaged nicely above 300p/kg lwt at Scottish marts, and averaged round 315p/kg within the second and third weeks of February.
Worth rises have additionally been seen at abattoirs throughout Britain, with the deadweight common for medium R3L grade carcases reaching 696p/kg within the week to 17 February.
In comparison with February 2023, when the lamb market had a weak begin to the yr, costs have been working 35-40% increased at Scottish marts, with the rise on the five-year common nearer to 30%,.
Retailer markets have additionally rebalanced considerably increased, with finishers paying a median of £101 for hoggs at Scottish marts in mid-February. This compares with £65 in the identical week of 2023.
Lamb costs have elevated regardless of public sale throughput holding up, the levy board’s evaluation, printed immediately (27 February), says.
Between late January and the third week of February, lamb numbers at Scottish marts had been working round 4% above these seen a yr earlier.
Iain MacDonald, QMS Market Intelligence Supervisor, explains that that is in keeping with the rise seen within the season-to-date.
He provides: “Given Scottish authorities estimates of a 4% smaller lamb crop in 2023, there could possibly be a tightening of availability later within the spring.”
Hogg throughput additionally held up nicely at GB abattoirs in January, with Defra reporting a year-on-year uplift of three.4%.
Which means complete slaughter between June 2023 and January 2024 was virtually precisely the identical as twelve months earlier than, regardless of the lamb crop throughout England, Wales and Scotland falling by 6.3% year-on-year.
“It’s attainable that enticing costs have drawn inventory out in January and February,” says Mr MacDonald.
“Whereas moist winter climate may additionally have affected hogg situation, the share of carcases grading at E, U or R and a couple of or 3L at GB abattoirs has been decrease than lately.”
One issue supporting lamb costs in current months is prone to have been home retail demand, in accordance with QMS’s evaluation.
Within the 12 weeks to January 21, Kantar reported a 13% uplift in spend throughout GB in comparison with a yr earlier, with a marginal decline in common worth which means a barely stronger rise within the quantity bought.
Gross sales of leg roasts drove the general improve, rising by roughly double the general charge, and an elevated share of customers seem to have been attracted into the class by barely cheaper costs.
“Abroad demand has additionally underpinned the market, with UK commerce knowledge displaying that export volumes had been considerably increased than import ranges in late 2023, leading to a tightening impact on market provide.”
In the course of the ultimate quarter, at over 25,100 tonnes, sheepmeat exports rose by 18% year-on-year and remained greater than double import ranges of 11,400t, regardless of imports displaying a 57% rebound from This autumn 2022.
“2023 This autumn imports additionally proved considerably cheaper than the earlier yr with none vital dampening impact on the home market,” observes Mr MacDonald.
The typical worth per kilo of imported sheepmeat was down 15% on the yr as increased import prices from the EU had been greater than offset by extremely competitively priced lamb from Australia and New Zealand.
“Extra lately, it’s attainable that longer delivery journey occasions to Europe from Oceania may have delayed import shipments and resulted in a threat premium within the market, the place concern across the arrival of imports could have introduced ahead purchases of home product.
“This will likely have additionally supported export demand from the EU, the place merchants may have confronted the identical issues,” Mr MacDonald says.
Trying ahead, home and export demand is ready to stay agency by way of March and into April. Ramadan begins on March 10 this yr, culminating within the Eid al-Fitr competition a month later and Easter falls on the ultimate weekend of March.
However Mr MacDonald is cautious. “Whereas underlying demand is predicted to remain robust, if the sharp worth will increase of current weeks and months start to move by way of the provision chain and into client costs, then this might begin to be examined.”
“On the provision aspect, it appears probably that numbers may tighten considerably because the spring progresses as there was a considerably smaller lamb crop in 2023, and public sale and abattoir throughput, to date, is holding up nicely.
“Though export demand is ready to carry agency because the EU ewe flock contracted additional in 2023, export volumes could possibly be restricted if home manufacturing falls.”
Figures from Beef + Lamb New Zealand recommend {that a} considerably elevated quantity left for the UK throughout January 2024 in comparison with early 2023, pointing to elevated imports in late-February and the primary half of March.
In the meantime, Australia’s sheepmeat manufacturing and exports are anticipated to proceed rising in 2024, with shipments to the UK aided by a rise in its TRQ for the UK within the second yr of the FTA.
“This might partially offset a number of the anticipated market tightening from home manufacturing,” concludes Mr MacDonald.
