Lamb prices holding firm, says Quality Meat Scotland
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Lamb prices have been holding firm as the industry moves into autumn, according to Scotland's red meat promotional body.
The latest market commentary from Quality Meat Scotland (QMS) says a reduced supply of finished lambs across Britain, rising export volumes and lower imports have been supporting Scottish lamb prices.
Given indications of a smaller lamb crop this year, lamb market supply looks set to remain low if the recent picture of firm export demand and soft import volumes continues.
Meanwhile, Iain Macdonald, market intelligence manager at QMS, points out that domestic retail lamb price inflation has slowed, which could help to underpin sales volumes this autumn, given continuing strong price increases for other proteins.
He said: “Despite a slow start to the season, weekly finished lamb auction volumes have reached a normal autumn range in Scotland. Finished lamb prices remain below the new season peak, reached in May, but began September at a record level for the time of year at Scottish marts.
"At an average of 245p/kg lwt in the first week of September, prices were up six per cent on the same week in 2022 and by 20 per cent on the five-year average.”
GB prime lamb auction sales trailed year-earlier levels in seven out of the eight weeks leading up to September 6. In Scotland, although the number of 2023-born lambs traded at marts has started to catch up with 2022 over the past month, it has been down six per cent on 2022 in the season to date, with a similar story across Britain.
“However, international trade is a significant part of the equation," Mr Macdonald said. "In 2022, around a quarter of UK sheepmeat production was exported, with imports contributing around a quarter of total UK market supply in carcass weight equivalent.
"HM Revenue and Customs data for the first half of 2023 highlights a firm export trade, with the volume shipped overseas rising by more than 14 per cent year-on-year and the average export price remaining close to the highs of 2022, down two per cent year-on-year at £6.64/kg.”
Meanwhile, import weakness in the final quarter of 2022 persisted into 2023, with UK sheepmeat import volumes down 32 per cent in the first half of the year despite highly competitive import prices averaging nearly 19 per cent lower than in 2022, down from £6.40/kg to £5.21/kg.
Mr Macdonald added: “The combination of a rise in export volumes and a fall in import volumes acts to reduce supply in the domestic market. In the first half of this year, this change in trade converted a slight rise in domestic production into a significant reduction in total market supply, down by 11 per cent on 2022 in product weight.
“Tight European Union supply has supported our export opportunities, with EU sheepmeat production falling 6.5 per cent year-on-year in the first five months of 2023, according to the EU Commission, while in the year as a whole, EU consumption is set to rebound to its highest level since 2019."
