Domestic sheepmeat supplies are forecast to fall still further in the coming year, according to the initial 2010 market outlook from EBLEX, the industry body for beef and lamb levy-payers in England.
This is considered likely to more than make-up for any fall in High Street demand in the face of continuing economic pressures on consumers and change in the import/export balance, resulting in a third relatively favourable annual market for lamb producers in a row.
As predicted at the start of last season, 2009 saw continued improvement on the favourable prices seen for much of 2008, with R3L lamb prices peaking at comfortably over £4/kg deadweight in April/May and staying ahead of the previous year in almost every month. The firm and far more predictable market position than earlier years was primarily driven by a lack of old season lamb carryover accompanied by a contraction of around 6% in both the breeding flock and overall sheepmeat production.
Good marketing conditions towards the end of 2009 and into the first part of 2010 are expected to result in very little store lamb carryover once again this spring. At the same time, the harsh winter is likely to rule out any further increase on the 121% reared lamb rate recorded last season.
The better marketing conditions of late and a lower than originally feared impact from the introduction of EID could well slow the annual contraction in the breeding flock to nearer 2.5% by the end of 2010. For the current season, though, the 4% decline in the ewe numbers recorded in last June’s agricultural survey and likely to be confirmed when the December survey results are available suggests a lamb crop around 2.2% down on 2009.
Culling rates are anticipated to continue at the relatively high rate of 16% seen for the past two years, with a particular loss of hills ewes resulting in a further increase in the proportion of the national flock in lowland areas. Overall, the forecasts predict total UK sheepmeat production will be around 294,000 tonnes in 2010 against 305,000 tonnes in 2009 – a fall of nearly 4%.
With sterling assumed to remain relatively weak against the euro, tighter sheepmeat supplies on the continent and strengthening export marketing activity from the levy boards, exports are forecast to continue growing in 2010, albeit at a less rapid rate than the 9% growth of the past year. This growth looks likely to almost exactly balance the expected increase in imports on the cards in view of the tightening domestic supply and good export trade.
Little prospect of a rapid recovery from recession and retail lamb prices remaining high relative to other meats means overall domestic consumption in 2010 is forecast to decline to around 328,000 tonnes. The fact that it will do so at almost exactly the same rate as production falls, however, implies relative buoyancy and stability in the market for another year.
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