Auction markets see a surge in new season lambs
INCREASED numbers of new season lambs have entered the market this year, with 22% more lambs sold at Welsh auction markets between March and the end of June compared to the same period in 2016.
In England, the figure was even higher at 26%. This can be attributed to a favourable growing season and improved market prices encouraging producers to sell their lambs earlier.
For the latest week ending July 1, the new season lamb SQQ at auction markets in Wales stood at 207.5p/kg, a decrease of 15p on the previous week’s average. Despite the latest fall, the level seen is 19p above the average for the corresponding week in 2016.
John Richards, Industry Information Executive at Hybu Cig Cymru – Meat Promotion Wales (HCC) said: “Lamb prices over the last month have been significantly stronger than those during the same period last year. This is linked to the weaker Sterling which has led to UK exports bringing better returns to our exporters, with the benefits subsequently felt by producers here in Wales. We also saw less of last year’s lamb on the market during June, which also helped the trade.
“The numbers of lambs sold weighing between 32-39kg increased by almost a third. The pattern is even more evident at English auction markets as reports show that throughputs were more than 50% higher in this weight category than in the same four month period last year.”
He added: “The liveweight lamb trade in Wales held up at historically high levels for much of June, but prices have eased slightly in the last few weeks to match the expected seasonal trend.”
Looking forward, it is expected that all the domestic supermarkets will switch to stocking UK lamb over the coming weeks. This may improve demand while the export market is expected to remain resilient due to the favourable exchange rate.
“These factors should have a positive impact on the market, however, as always, the supply of lambs will dictate price fluctuations,” said John Richards. “The coming month will give us a better understanding of the true market situation. Last year the market was significantly affected due to the EU referendum in late June which caused Sterling to fall dramatically.”
For the latest week ending July 1, the new season lamb SQQ at auction markets in Wales stood at 207.5p/kg, a decrease of 15p on the previous week’s average. The latest price is some 35p below the average seen the fortnight before. Despite the latest fall, the level seen is 19p above the average for the corresponding week last year.
The deadweight lamb trade improved during early June but has come back in the last week however the latest price is significantly higher than the level seen last year. For the week ending June 24, the GB deadweight lamb price stood at 487.4p/kg, a fall of 22p on the previous week. It is reported that the deadweight trade has followed the liveweight prices and as such it is expected that the average price will be back again during the week ended July 1.
At the current levels prices are almost 75p above the deadweight price seen during the same week in 2016 which was pre-EU referendum and as such the strength of Sterling caused some difficulties for UK exporters.