Lamb prices drop arrives ‘far too soon’
SHEEP farmers and early lamb producers in Galway are hoping that prices will stabilise over the next week or so after a dramatic slump that began at the start of last week.
Prices fell by about €10 a head last week and this week, on average, they have taken another €5 tumble as the factories ‘pull the prices’, probably on the basis of increasing numbers coming on stream.
A consumer squeeze in the French economy and a large number of hoggets ‘still standing’ from last year, have also been put forward as reasons for the dramatic drop in prices.
Last year, the ‘normal’ summer price drop didn’t happen until the first week in June while the market remained very sold through July and August, with the weekly ‘kill’ hitting the 70,000 mark during those latter months.
Galway IFA Sheep Committee Chairman, Michael Murphy, told the Farming Tribune that the prices were dictated by the factories but he added that farmers were taken aback somewhat by the early price drop.
“Last year the drop didn’t come until early June while this year the prices dropped from mid-April, a good six weeks earlier than last year,” said Michael Murphy.
He said that while the IFA were involved in regular meetings with representatives of the factories the pricing regime was largely dictated by the supply and demand balance, and what the meat plants decided to pay.
“We are hoping that at least the situation will stabilise next week and there won’t be any further drops. Early lambs are very expensive to produce and unless sheep farmers get a good price for them, then they’ll think twice about staying with early lambs,” said Michael Murphy.
He said that they were getting some feedback about a drop-off in demand for lamb in France, due to a consumer squeeze, while there were still a lot of hoggets coming out.
“The only thing I would say is that there hasn’t been any increase in ewe numbers across the country so I wouldn’t expect lamb numbers in the West, or across the country, to be higher than last year,” said Michael Murphy.
Pre-Easter, prices for lambs at the factories touched the €7 per kg. mark but this week they were back to €5.80/€5.90 per kg, and this was reflected in a drop in mart prices.
According to Athenry Mart, the sudden slump in the factory prices was prompting many sheep farmers to question the merits – and the economics – of producing early lamb. Gort Mart also said that sheep farmers were very disappointed at the sudden drop in prices.