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The sheep trade has thankfully turned a corner after last week’s collapse in market prices. Factory prices have recovered a percentage of the ground lost last week, with prices rebounding to the tune of 10c/kg to 20c/kg.
Factory quotes for Thursday are in the region of a base of €5.10/kg for hoggets and €5.90/kg to €6.00/kg for spring lambs.
Quotes are confined to plants in the east of the country, with Dawn Meats and Kepak Athleague not quoting for Thursday.
Reports indicate that hoggets are trading anywhere from €5.10/kg to €5.40/kg on average, with a small selection of hoggets rising to €5.50/kg when bonuses or payments towards haulage are included.
Some factories report the quality of hoggets coming on stream becoming much more variable.
With the domestic market playing a greater role in recent weeks, there is a focus on quality assured (QA) product.
Factories are also willing to negotiate on the higher prices of €5.30/kg to €5.40/kg where hoggets are presented with an adequate cover of flesh and killing lower than 23kg carcase weight.
Market recovery
The upturn in the market is being driven by a combination of improved market demand and a tightening in supply.
The upturn in market demand is stemming from factories starting to fill orders for the Easter trade, with purchasing for this market likely to continue into the start or middle of next week.
Orders are nowhere near the magnitude of where they would be at if coronavirus had not hit, but have at least recovered somewhat on last week.
Producers will be hoping that demand for Ramadan, which starts on 23 April, helps to bolster the trade post-Easter.
The tightness in supply is stemming from some producers opting to cease drafting in the wake of prices collapsing.
Many producers who were enticed to kill ewe hoggets at the higher prices on offer are said to be now opting to let these run on to breeding sales.
The reduction in numbers is reflected in last week’s kill reducing by over 10,000 head to 45,666. This includes 41,089 hoggets or lambs and just 4,575 ewes and rams.
Numbers are drying up, with producers pushing out higher numbers earlier in the season. This has contributed to the kill running in the region of 130,000 head higher to date than in the corresponding 13-week period in 2019.
The reduction in the kill is also influenced by the number of sheep coming south for direct slaughter from Northern Ireland reducing to 5,686 last week.
This signifies a reduction of over 2,000 head on the previous week, with supply channels disrupted by the closure of marts in Northern Ireland.
Spring lambs
The spring lamb trade varies between plants. The two Irish Country Meats plants are out in front in their demand and are quoting a base of €6.00/kg.
Prices paid range from €6.00/kg to €6.20/kg, with isolated deals 5c/kg higher.
Factories are implementing a 20kg carcase weight cut-off, so it is important for farmers to draft lambs carefully and keep them moving as they come fit for slaughter.
Marts have also been given sanctions to operate a trading platform under strict guidelines. This is providing an opportunity for farmers who usually trade to butchers or wholesalers or who prefer to use this trading avenue over negotiating directly with factory agents.
Some marts are already up and running with the service, while others have shown low levels of interest.
Market support
There is no doubt that the market would be in a much stronger position if the coronavirus pandemic had not curtailed market demand.
IFA national sheep chair Sean Dennehy is calling for market supports to be introduced: “The COVID-19 crisis is having a very severe impact on the sheep sector, with the loss of major market segments and prices down as much as €1/kg. This is a devastating blow for sheep farmers with stock for sale, who are facing a price drop of over €20 per lamb.
“The IFA has made a detailed submission to Minister Creed and the EU Commission seeking EU action in the form of direct payment aid, APS market supports, suspension of non-EU imports and promotions.”
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