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The sheep trade has stepped up another gear, with factory quotes rising by 10c/kg to 20c/kg. Kildare Chilling remains in front with its base quote of €4.70/kg and 10c/kg Quality Assurance (QA) bonus. Kepak Athleague has jumped 15c/kg to a base of €4.60/kg plus 15c/kg QA bonus.
The two ICM plants in Navan and Camolin, along with Dawn Meats, are quoting a base of €4.60/kg plus 10c/kg QA. Ballon Meats has increased its quote by 20c/kg to an all-in price of €4.70/kg, while Moyvalley Meats is also quoting €4.70/kg.
There is a widening differential developing between prices paid. Sellers with low numbers and less negotiating power are moving lambs in the territory of €4.75/kg to €4.80/kg as the week progresses. Sellers with higher numbers are securing returns of €4.85/kg to €4.90/kg, with producer groups in cases now exceeding €4.90/kg.
Returns of €5.00/kg have been paid in a small number of cases to producers handling large numbers, with factories extremely keen to tie into long-term supply channels.
Reports suggest there are more sellers with significant numbers realising they are in the driving seat in negotiations and holding out for €5.00/kg.
Agents are also purchasing well outside their normal catchment areas, with significant numbers moving from the west to plants in the east.
The increase in price is being driven by a combination of tighter supplies and improved demand. The tightness in supply is reflected in last week’s kill reducing by 4,822 head to 57,118. This is a fall of 8,544 head on the corresponding period week in 2018.
Reports show that rising prices are having the desired effect in enticing higher numbers forward and this is where the big positive lies, with factories anxious to continue to try to maximise the kill.
Tighter supplies are also helping the ewe trade, with quotes rising 10c/kg and ranging in general from €2.50/kg to €2.60/kg. Agents handling higher numbers are securing significantly higher, given their purchasing strength in marts, making this a good outlet for producers struggling to negotiate.
The trade in Northern Ireland has also improved, with quotes rising by 15p/kg to reach £3.85/kg. This is the equivalent of €4.43/kg at an exchange rate of 85.8p to the euro and €4.67/kg including VAT at 5.4%.
Again, regular sellers and groups with greater negotiating power are securing returns rising to £3.90/kg to £4.00/kg (€4.67/kg and €4.91/kg incl VAT).
Factories are keen to tie into supplies and are competing with agents purchasing on behalf of southern plants. Numbers coming south for direct slaughter reduced by 554 head to 8,891. Tighter supplies in the UK are having a positive effect on the trade balance across Europe.
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