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Report Analyses Outlook for the Sheep Sector

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The number of lambs that have already come forward from UK farms so far in 2021 is behind what would be expected, according to a new report published by Hybu Cig Cymru – Meat Promotion Wales (HCC) which analyses the outlook for the sheep sector.

So far this year, the total throughput of lambs from the 2021 lamb crop is below what would be expected at 5.99 million head. This is 12.7% lower than year-earlier levels, and 10.9% below 2019.

However, a number of other factors will combine over the coming weeks which suggest that the current above-average market prices for lamb may continue.

Glesni Phillips, report author and Data Analyst at HCC said:

“Despite the unsettling effects of the Covid-19 pandemic and Brexit on supply chains, the average price of lambs is strong, helped by buoyant retail demand. Prime lamb live and dead weight averages in Wales are currently averaging some 20% above last year’s levels.

“A tight supply since the start of 2021 has been a key factor in this price hike which has also led to a lower level of lamb production throughout the year. Another contributory factor is the shortage of staff at many UK abattoirs which may have limited the level of throughput at processing sites each month.

“The reduced throughput of lambs experienced so far this year may also be partly due to higher retention rates in UK breeding flocks. This would mean that not all of the expected lambs would come forward as a higher proportion would be kept on farm for future breeding.”

HCC’s report also looks at the short-term outlook for the sector.

Glesni added:

“Looking at the remainder of the year, it is expected that an increased number of lambs will come forward over the coming weeks and months. However, decreased volumes of New Zealand lamb reported to be making its way to the UK due to on-going difficulty in the shipping industry, could lead to an overall tightening in supply when compared to previous years.

“The supply of both New Zealand and Australian sheep meat is currently tight, with New Zealand production down some 4% on the year. This is reflected in the UK trade data from HMRC which shows that imports of fresh and frozen sheep meat from both New Zealand and Australia are down.

“Demand for lamb on the domestic market is firm, and this has also provided support to UK lamb farmgate prices. Although spend has fallen below year-earlier levels as predicted, consumers are spending more than they did in 2019 before the pandemic. With Christmas coming up, this demand is likely to continue.”

The report – ‘Lamb Supply: Update and Outlook 2021’ – is available to download from the HCC website: https://meatpromotion.wales/en/news-industry-info/market-analysis