New season lamb prices may have slipped on the week, but they remain higher than last year and should remain buoyant for most of the year, according to those in the know.

Speaking to The Scottish farmer, Robert Logan, livestock and business consultant for SRUC said that despite increased feed costs, producers should be able to achieve gross margins of £44 per ewe based on relatively conservative average lamb prices of £70 per head.

"This year should be a better one for the industry as they have not had the feed costs of previous years due to the early spring and the fact that more are lambing later into April and May when grass is available."

Despite feed costs being £5-£10 per tonne more than this time last year, he said producers have not have needed the same amount for their ewes on the run up to lambing. However, Mr Logan urged producers to keep lambs moving as soon as they are ready.

"We have seen a good trade for lamb over the past few weeks on the run up to the big festival to commemorate the end of Ramadan, and while that as come to an end, trade should remain fairly robust until lambs come onto the market in big numbers, which is usually into September/October.

"The good thing about this year is the next big Muslim festival, Eid al-Adha is on September 1, which is earlier compared to previous years and before the big glut of lambs traditionally appears on the market," he said.

"This is a year to keep your lambs moving because the more that can be taken out of the system before big numbers come on the scene the better. The industry has the chance to take advantage of another Muslim festival in September and bear in mind it's not just lambs Muslims eat they also look for cull ewes," said Mr Logan.

Ramadan, which started on 26 May, with the festival of Eid al Fitr on June 25, moves forward 10 days each year, as does Eid al-Adha. This year Eid falls when the supply of lambs is especially tight in Northern Europe, too.

At the same time, early lambs have finished somewhat later than normal because of the adverse spring weather, Mr Logan pointed out.

Not surprisingly, lamb prices are up on the year, not just in this country but also in the EU. Figures from AHDB show that by early June, the EU heavy lamb prices had moved up by 20%, to €543 per 100kg dw, compared to early March and was 5% higher than a year earlier. It was also higher, although only by 2%, compared with the 2012 to 2016 average for the same week.

The UK is by far the largest heavy lamb producer, and has a weighting of 50% in the EU price, and developments have applied equally to the UK.

In addition, there have been major shortages of New Zealand lamb on the EU market throughout with EU sheep meat import data indicating a reduction of 20% on a year earlier in January-April. Subsequently, total EU imports were down 17%. Similar developments seem inevitable in May too given the further fall in New Zealand exports to the EU in April.

For the same month, the NZ export price on product consigned to the EU was up by as much as 24% in euro on April 2016 and for product shipped to the UK was up 32% in sterling. The firming global market must also have contributed to the increase in EU exports.