Meat Market

As soon as the results came through from the UK referendum the value of the Pound fell sharply against both the Euro and the US Dollar.  As the uncertainty continues Sterling has further weakened, this should provide some competitiveness in the meat market, at least in the short term, for UK farmers.  This is particularly true for the UK sheep market which is very dependent on the exchange rate.  Approximately a third of UK sheep meat is exported, with the majority going to countries within the Eurozone.  The weak Pound makes UK lamb more competitive in the market.  The UK Pound has also weakened against the New Zealand Dollar, this means sheep imports to the UK will be less competitive compared to other EU destinations.

The beef market, in particular the prime trade, is less dependent on exchange rates.  But a weaker Pound will help the cow beef trade and will also increase the price of Irish beef imports in Sterling terms.

Even before the referendum, over the last couple of months beef prices have been moving in the right direction for producers.  Reports are that ‘queues’ at abattoirs are non existent and the supply/demand balance has swung back in favour of suppliers.  Prices are moving closer to those seen last year.  For much of the early part of the year the R4L steer price was about 30p per kg less, it is now nearer 16p per kg less.  Although going into the second half of the year availability is expected to increase which could put downward pressure back on prices.

Lamb prices have fallen in recent weeks as more new season lamb has become available.  Although below the five-year average, prices are better than year earlier levels.  Figures from AHDB beef and lamb show lamb slaughterings down by 6% so far in 2016, but adult sheep up by 12% compared to 2015.  This points to a possible reduction in the breeding flock and also higher numbers of lamb available in the second half of the year.