EU sheep prices softer

Prices for finished heavy lambs have been generally weakening. The EU average price reached €6.43/kg in the week ending 25 July, having lost 5% of its value over the last six weeks, and peaking in mid-April at over €7/kg.

Each European national market very much has its own dynamics. Nonetheless, our nearby export markets can influence prices in the UK, and these markets have broadly softened recently. However, increasing domestic supplies and slowing demand growth are probably also influencing the seasonal drop-off in UK prices.

In euro terms, French prices have been showing a little more stability of late, hovering around the €7/kg mark for the past several weeks. But, sterling has been inching up against the euro too. This by itself slightly reduces the competitiveness of UK product on the continent.

The German market has maintained much of its strength. Spanish lamb production has been stable this year and exports have been strong; relatively lower prices will have made exports competitive against UK lamb into the French market. The European Commission expects EU sheep meat production to be stable for the year overall. A declining EU flock will limit slaughter going forward, although production had been higher at the beginning of the year and imports lower.

EU imports of sheep meat were down by 25% year on year in the first four months, including a 17% drop in imports from the UK. Some challenges remain for UK companies exporting to the EU, although we do expect exports to recover somewhat as the year develops. For more on this and the rest of AHDB’s forecast for the UK sheep sector, read the latest outlook, released only last week.

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