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Stackyard News Feb 2011

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Tight Lamb Market Despite Increased 2011 Crop

Despite the first increase in the national lamp crop for six years, the relatively strong market conditions of 2010 are forecast to continue over the coming year, mainly as a result of tight European and global supplies, according to the latest annual market outlook from EBLEX, the industry body for English beef and lamb levy payers.


Ewes and lambs

Having declined by an average of 3-4% each year since 2004, the UK June agricultural census showed a slight rise in breeding ewe numbers in 2010 together with a 9% increase in the number of ewe lambs retained for first time breeding. On this basis, the national flock is expected to stabilise in 2011 at just under 15 million ewes.

With a rather less harsh late winter likely to see lambing rates recovering from the low level of last year, the lamb crop is forecast to show a marginal increase in the coming season. Markedly lower annual culling levels than in recent years as a result of younger flocks and good market prospects, however, means overall domestic sheepmeat production is anticipated to be slightly lower than the past year.

Domestic consumption fell noticeably in 2010 as the consumers felt the economic pinch and lamb shortages pushed up retail prices relative to alternative meats. A further fall is expected in the coming year as household budgets come under increasing strain.

Fortunately, any reduction in domestic demand is considered unlikely to undermine the strength of the UK lamb market over the coming 12 months. This primarily results from the continued tightness of supplies across Europe and New Zealand.

Severe weather at the most recent lambing in New Zealand, indeed, led to the lowest national lambing percentage since the mid-1990s and a large drop in the lamb crop. This and flock rebuilding means annual UK sheepmeat imports are forecast to remain a good 10% below 2008 and 2009 levels.

At the same time, lamb production is expected to fall in both Ireland and France, maintaining a strong demand for UK exports even if sterling strengthens somewhat against the euro.

UK sheepmeat market

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