Could a lack of supply be driving current lamb price trends?

By Rebecca Wright

In recent weeks GB lamb prices have recorded some unusual trends for the time of year. Typically at this time of year prices come under pressure as demand eases after Easter and numbers available for kill pick up. This year, despite the seasonal rise in numbers available for kill, prices have remained supported. While this might usually indicate a rise in demand, this time it is likely supply is the supporting factor.

While recent industry reports suggest there are plenty of British lambs available for kill, total supply within the EU is under pressure.

EU-27 production dropped 10% (5,500 tonnes) year-on-year during April. Many countries are yet to publish data for May, however France and Ireland have both recorded declines in production. Meanwhile, exports by New Zealand to Europe were down on-the-year during April and May, 47% and 37% respectively. With a six week shipping time, it is that product which is reducing current supplies.

With the current COVID-19 situation it is hard to imagine demand for lamb in Europe is growing strongly. Although, there is currently some additional demand, with the Islamic festival of Eid-al-Adha falling at the end of this month.

During the week ending 8 July, the GB liveweight NSL SQQ lost ground and slipped almost 7p, to 221.91p/kg. Despite this decline prices remain high for the time of year. Industry reports suggested demand was largely for heavier types, with some of the lighter lambs weighing on average prices. Throughputs for the week picked up 3,500 head, to 119,000 head.

In the week ending 4 July, the GB deadweight NSL SQQ increased 17.2p, to 488.3p/kg. Estimated kill for the week totalled 217,800 head, marginally higher than in the previous week.

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