Reduced breeding ewe populations as a result of tree planting and rewilding are expected to uphold finished lamb prices in the coming years, according to the Andersons advisers.

They said supplies are likely to remain relatively tight for 2024 which are supported by indications of fewer lambs available in Australia for export.

To date imports from Australia account for a small proportion of sales when it is more reliant on exports to China which could be disrupted in the event of a major geopolitical crisis.

However, with the current disruption in the Red Sea area, they said supplies from both Australia and New Zealand to the UK and the EU are affected to some degree.

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According to their data, UK sheepmeat accounts for 12% of global exports whilst 17% of sheepmeat of sheepmeat exports are from EU member states of which most is from one member to another.

In total, 93% of the value of all UK sheepmeat in 2023 was exported.

The outlook for beef sector also appears strong as supplies from Ireland are forecast to be lower and the demand for key cuts, including roasting joints remains firm.

Nevertheless, the team pointed out that the amount of beef that could be imported from New Zealand and Australia via tariff rate quotas is increasing and overall demand is expected to stagnate. Therefore, they expect some weakening of prices towards the end of 2024, albeit about the historical average.

Looking at their Andersons Centre typical mixed beef and sheep unit in Scotland – Meadow Farm comprising of 380acres of mostly grass and some feed barley in the Scottish lowlands – margins are expected to fall due to higher overhead costs. See table.