Following weeks of record prices and averages for prime old season lambs sold live and deadweight, values have headed south this week, as numbers and quality declines and more spring lambs appear on the market.

However, with last week’s GB average rising another 4.7p on the previous seven days to level at 312.3p per live kg, the trade ended on a high – being 96p per kg above the price achieved in the same week in 2020 and more than £1 higher than the five-year average.

New season lamb values are on the decline too, with last week’s GB averages down a hefty 14.8p per live kg at 346.0p, which in turn, is still up 82.0p on the same week a year ago.

Total throughputs of old and new season lambs sold through GB auction marts were nevertheless up 22% on the previous seven days, and estimated at 117,900 head for the week, which represents a rise of 48% from the same period in 2020 and partially due to a return to full trading after Easter.

Prices for all old season lambs at the early markets of this week slipped further too, with average values on Monday in Scotland levelling at 289.3p, down 6.6p per kg on the previous week for 4093, with the 1170 cashed on Tuesday, falling a massive 25.7p per kg to average 269.7p.

It has been a similar story south of the Border, with 12,242 hoggs sold on Monday in England and Wales, averaging 283.6p, down 11.5p, with just shy of 12,000 cashed the following day to balance out at 280.2p, which represents a fall of 9.4p, on the previous week.

New season lambs are starting to hit the buffers too with just 43 cashed on Monday in Scotland selling at 345p, up 8.1p on the previous seven days, while the 49 sold on Tuesday dropped 17p per kg, to level at 306.4p.

Meanwhile, the trade for prime spring lambs in the South on Monday saw 7567 head rise 7.3p to 342.6p, with 3118 sold on the Tuesday at 354.2p (+14.1p).

In contrast, deadweight prices have held up better, with some centres quoting £7 per kg last week.

According to Quality Meat Scotland senior economics analyst, Iain Macdonald, the 2021 sheep trade has been supported by a smaller carry over of hoggs with slaughter numbers down 10% year on year in the January to March period.

December census data highlights the reduction in availability of hoggs, with 2.4% fewer slaughter lambs on Scottish farms and 5.5% less in England at the end of 2020.

One identified factor limiting supply has been an increased retention rate, driven by strong store and finished lamb prices, resulting in a 14% surge in lambs put to the tup in Scotland. A sharp reduction in ewe slaughter of 15% at GB abattoirs in 2020 also points to increased retention rates, he said.

December census results can also point towards potential supplies in the 2021/22 season.

In Scotland, while the way the questions are asked can vary from year-to-year, the figures are suggestive of a small increase in the breeding flock, with 0.8% more breeding ewes on farm at the end of 2020. Meanwhile in England, the total breeding flock rose by 0.4%, suggesting a small lift in overall ewe numbers.

“However, once you factor in the cold wet start to the year, and then the cold, dry April, it seems unlikely that last year’s record lambing percentage will be repeated in Scotland, while England and Wales also had very good lambings in 2020. Therefore, we may struggle to match last year’s lamb crop.

“The cold, dry spring across GB also suggests that lambs will grow more slowly than last summer, taking longer to arrive on the market. However, if the grass does begin to grow, this could quickly change come June and July,” said Mr Macdonald.

Looking further afield, despite firm lamb markets in the UK and EU, and its companies exporting more lamb onto the world market, New Zealand has exported considerably less product to Europe in 2021. Its exporters have continued to rebalance towards China, where wholesale lamb prices are currently equivalent to £8.60/kg.

“On the export side, exiting the EU single market has made it much more challenging and costly to export to EU countries. Trade data from HMRC up to the end of February shows that while UK sheepmeat sales to the EU increased by 9% between January and February, they were still nearly a third behind year earlier levels, following a reduction of 47% in the opening month,” said Mr Macdonald.

The new trading environment has also had a major impact on the composition of exports, with carcases and half carcases of lambs surging to a 79% share of volumes sold to the EU in early 2021, up from 47% in early 2020. By contrast, bone-in cuts fell from 30% of exports to 13%, and boneless cuts from 6% to 2%.

“Exporters and hauliers are nervous about potential delays and rejections at the Border for mixed loads of products, especially those from different processing sites requiring separate paperwork. Looking forward, it is difficult to see this situation improving without a change in trade protocols.

“In addition, exporting companies have reported that it is difficult to compete in key EU markets. Highlighting this, the wholesale price of imported R grade carcases at Rungis market in Paris on April 21, was only 6% above the latest GB deadweight price, converting to £7.16/kg. Before the recent upturn in France around Easter and Ramadan, there had been even less of a difference,” explained Mr Macdonald.