December 30, 2003

 

 

UK Sheep Sector Show 2nd Consecutive Year Improvement

 

The United Kingdom's sheep sector has shown improvement for the second consecutive year, producing the best and most stable trade for five years.

 

The national flock remains well below pre-foot-and-mouth levels at 17.5m head.

 

While lamb numbers are thought to be 3.5% up on the 2002 crop, exports have risen 18% to 49,023t.

 

Prices for R3 lambs began 2003 at 247p/kg. The top price for the year was achieved in mid-May at almost 349p/kg/dw.

 

Once the new season flush was over, prices returned to about 240p/kg during the autumn, a level which auctioneers describe as remaining very strong.

 

Overall, lamb values in 2003 were about 10% above the previous year's level, despite a slight fall in sheepmeat consumption.

 

With consumption unlikely to change in 2004, the market will depend on the size of the breeding flock, and provisional Defra figures suggest little change.

 

And, given that the dry summer of 2003 is likely to have affected conception rates, a lower lambing percentage for 2004 could mean that the supply/demand equation is likely to support prices.

 

Scope for improved export trade remains a big hope for 2004.

 

It is set to build on this year's recovery, up another 8% to regain 70% of the trade seen before foot-and-mouth disease put a stop to shipments.

 

CAP reform means 2004 is likely to trigger important business management decisions for many producers.

 

The extent that producers will use the single farm payment to support production and cross-compliance requirements will have a significant effect on the numbers of ewes kept.

 

Production costs will come to the fore once subsidies are decoupled from production.

 

But it will also create opportunities for sheep farmers who will no longer be restrained by sheep quota, ewe premium or retention periods.