The exceptional increase in domestic sheep meat supplies that contributed to the downward pressure on lamb and cull ewe prices over the past year look set to be reversed in 2006,  providing the prospect of  better new season returns  for English sheep producers.

photo courtesy of www.jennifermackenzie.co.uk

This is the encouraging outlook from the English Beef & Lamb Executive (EBLEX) in its latest annual market forecast. It is however stressed that the extent to which prices respond will be determined by carcase quality, competition from chilled imports, export opportunities and the state of the skin market.

Good lambing percentages and lamb survival rates together with lower ewe lamb retentions for breeding led to a 4% year-on-year increase in total lamb slaughterings in 2005 to over 13.5 million. At the same time, ewe and ram slaughterings at just over 2 million were 10% up on the previous year. As a result overall sheep meat production was nearly 4% higher than 2004 at an estimated 317,000 tonnes.

The higher culling rates and lower ewe lamb retentions of 2005 is expected to leave a national flock going into the 2006 season some 200,000 down on last year at around 16.1 million ewes. There is also the likelihood of a slightly lower lambing rate, based on initial scanning reports from across the country. This leads to clean sheep slaughterings for 2006 forecast to be back down to a level of just over 13 million.

Although a further modest contraction in the national breeding flock to 16 million by the end of 2006 is anticipated, lower culling rates are expected which could bring cull ewe and ram slaughterings back down to 2004 levels. Total UK sheep meat production in the coming season is, consequently, likely to be down by around 5% to just over 300,000 tonnes - or around the level of 2003.

Coupled with the increases of 2% in domestic lamb consumption and over 2% in export volumes recorded in 2005, this bodes well for a better balance between supply and demand over the coming season.

While the overall market essentials are set fair, producers are advised not to expect early new season lamb prices, in particular, akin to 2003 levels. The growth in chilled lamb imports that has resulted in a significantly flatter monthly pricing curve over the past two seasons - with both the level and duration of peak prices markedly lower than traditionally received - is expected to continue.

At the same time, the skin market which can have a major influence on overall market prices remains depressed and is considered unlikely to show much in the way of sustained recovery.

Under these circumstances, EBLEX urges English producers to focus their main 2006 season efforts on maximising returns by marketing a steady supply of finished lambs off pasture at the specific carcase qualities and weights required by the main market outlets - and, most importantly, at the least possible cost. Detailed production guidance is available in the Lamb Action for Profit resource at www.eblex.org.uk

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