Lamb Prices Stabilise with Tight Supplies

IFA National Sheep Committee Chairman James Murphy said with factory prices of €5.30 to €5.50/kg being paid this week, lamb prices have stabilised and with very tight supplies and strong market returns up to €6.00/kg, factories have an oppourinity to restore base prices back up towards €5.50/kg.

James Murphy said it was clear factories could lift their base prices substantially. He said with their lower quoted prices factories were taking advantage of the commitment producer group’s had made to them.

James Murphy said IFA met the lamb factories last week and told them of the anger and frustration among sheep farmers against the way they had pulled down lamb prices to loss making levels for sheep farmers. He said the industry had attempted to take advantage of sheep farmers following the exceptionally high cost this spring and fodder crises.

The IFA sheep chairman said there was no reason why lamb prices cannot rebound somewhat as market returns are strong and supplies remain very tight. In addition Bord Bia are in the middle of their main TV promotional campaign and retailers are driving consumption with special offers.

James Murphy said the live export trade had resumed again and with Ramadan on July 9th this should introduce much needed competition into the trade at this critical time. He said IFA was working hard and making good progress on the expansion of the live export trade for lambs.

James Murphy said IFA also met Super Value last week, the largest lamb retailer in the home market. He said “IFA made it very clear to Super Value the real difficulties sheep farmers have encountered this spring and the increased cost involved. IFA also highlighted the important role Super Value play with the largest processor on lamb prices and their collective responsibility to support the price.”

James Murphy said this is a critical period for lamb prices and he warned the factories against moves to undermine prices and the market. He said the domestic market is very strong and Irish exporters are the main players on the export markets at this time of year as UK lamb has not yet arrived.

IFA also met with the NFU (National Farmers Union) in the UK last week on lamb prices. James Murphy said the clear message from the UK is prices are reasonably stable at the equivalent of €6.00/kg. He said the NFU stressed the importance that Irish processors do not undermine the export market in France with cheaper product.

The IFA Sheep farmers’ leader said there was no market justification for the severe price cuts of the last two weeks. He said lamb supplies are in very tight supply and farmers should strongly resist the price cuts.

James Murphy said with the unprecedented weather and fodder problems this spring, production costs were exceptionally high and farmers simply could not afford excessive factory price cuts.