Sheep trends: power in producers' hands

Demand for spring lambs is currently outstripping supplies coming on stream. Throughput is not being helped by hogget numbers continuing to fall.

Many specialised finishers who were propping up throughput are now reported as entering tail-end supplies. This is putting more pressure on factories to source spring lambs. This couldn’t be happening at a worse time for plants, with demand boosted this week by the start of the Ramadan festival.

Plants have increased quotes for today by 10c to 20c/kg, with Kepak leading the table on their base quote of €6.15/kg. Sellers are in a strong negotiating position, with producers with significant numbers faring best.

Reports show these sellers currently securing prices ranging from €6.20/kg to €6.30/kg, with group prices pushing beyond this range by merit of rising base quotes.

Sellers handling smaller numbers were securing prices ranging from €6.10/kg to €6.15/kg at the start of the week, but are now having more success in pushing towards €6.20/kg.

Carcase weight limits remain at 20.5kg. Plants are keen to maximise the number of lambs within the 17kg to 20.5kg weight range, with some sellers being offered a bonus payment for lambs meeting this spec. Producers should continue to draft lambs regularly.

Those with lambs falling outside the factory weight and struggling to negotiate for small numbers should also be mindful of a very brisk mart trade where agents are looking to strengthen throughput.

Buyers purchasing lambs for southern plants for northern marts have driven prices upwards in the last week. Northern plants have taken steps to remain competitive and have increased quotes by 20p/kg to £4.80/kg for today. At 86p to the euro, this is the equivalent of €5.88/kg.

Reports suggest sellers with high numbers are holding out for more and, in cases, using interest from southern buyers to strengthen their hand. The number of sheep imported south for direct slaughter last week was recorded at 3,707 head, a fall of 671 on the week.

Cull ewes

Ewes remain a strong component of the total kill. Last week’s total kill reduced 731 head to 51,673, of which 7,813 were ewes and rams. This is 1,606 ahead of the same week in 2016, with the total kill ewe and ram running 15,532 ahead of 2016 levels.

Prices seem to have steadied after falls in recent weeks, with quotes ranging from €2.50/kg to €2.60/kg. Prices paid to regular sellers are generally 10c/kg to 15c/kg higher.

Carcase weights continue to range from 40kg to 45kg, with some plants also imposing cuts on fat cover.