IFA Sheep Chairman Kevin Comiskey said the further weakening of lamb prices this week by factories is not acceptable and must stop.
He said factories must do more in the market place to support sheep farmers and the Minister for Agriculture Charlie McConalogue must come forward with meaningful supports that will restore confidence in farmers selling and finishing lambs.
Teagasc has forecast margins from sheep production to decline this year, with lamb prices insufficient to cover increased costs of production. Their Outlook report forecast the average Family Farm Income on sheep farms to decline by 20% in 2022.
He said sheep farms do not have the capacity to absorb this level of decline in income, with this latest drop in lamb prices coming at a critical time for the sector compounding the situation.
IFA has highlighted directly to the Minister and the factories earlier this year the importance of direct supports for sheep farmers and strong lamb prices to maintain our production systems, ensure the orderly marketing of lambs throughout the year and a strong store lamb trade given the production costs farmers are exposed to.
“The Minister has yet to come forward with a targeted payment for sheep farmers to support the orderly feeding and finishing of lambs which is certainly contributing to the increase in numbers of under finished lambs presented to factories,” he said.
Kevin Comiskey said the sheep factories are not without blame and their failure to provide strong and meaningful prices to farmers as a signal to invest in the orderly finishing of lambs is also a critical factor while continuing to import live lambs and carcase lamb.
Prices in the UK have started to rebound and critically in the key French market prices continue at over €8.00/kg. This must be reflected in prices for lamb offered by factories.
Kevin Comiskey has called on factories to play their part; stand firm in the market place; reflect the strength of the French market in prices offered to farmers; and give minimum price guarantees for the coming months.
The numbers of suitably fleshed lambs are scarce. Factories are paying to 22kg to secure these lambs. Throughput is running 7% above last year’s levels and earlier movement of lambs in the UK and throughout Europe should provide a solid basis for the lamb trade for the coming months. However, factories must reflect this in current and future prices for lambs.
“Farmers should sell hard, while conscious of lower kill out weights and under fleshed lambs to take back control of the supply demand balance and maximise returns,” he concluded.