The AHDB is forecasting UK sheep meat production to decline by 2.9% in 2024 compared with 2023, to total 278,000 tonnes in its latest Lamb Market Outlook. In February, it was estimating a -1% decline (see https://abcbooks.co.uk/sheep-outlook-3/).
The lamb crop for the 2024/25 season (March to March) is expected to be 15.9 million head, a decline of 185,000 (1.2%) from the previous season as a result of a smaller breeding flock at 1st December 2023 (at 13.8m head this was the lowest since current records began in 1996) and lower scanning rates. In terms of clean sheep slaughter, the AHDB is estimating the carryover for 2024 of old season lambs was just over 4 million head from January – May. This is a decline of -6.5% (280,000 head) on the year. It is despite a higher level of ewe lambs being slaughtered instead of being kept for breeding as farmers took advantage of the very high old season lamb (OSL) prices being achieved. Furthermore, the number of new season lambs (NSL) slaughtered in the first half is also expected to be lower than in the same period for 2023, by some 235,000 head to 1.42 million, supporting prices to the record values realised over the first half of the year.
Looking forward to the second half of the year and assuming a typical slaughter pattern, clean slaughter numbers are expected to be up by 1% (48,000 head) to 6.4 million. Adult sheep slaughter experienced a sharp decline in the first half of the year compared with 2023, there is expected to be a slight improvement in the second half. However, there is still expected to be a fall of 3% over the whole year compared with year earlier levels.
In terms of trade, imports are forecast to increase by 12% year-on-year for the whole of 2024. This rise comes from a low base though, as 2023 imports were only 10,800 tonnes, compared with a five year average of 17,000 tonnes. Imports from New Zealand are already estimated to be 10,500 tonnes, the majority being frozen leg joints which were apparently needed to fulfil Easter orders. These shipments are expected to slow down over the rest of the year as domestic lamb numbers increase and NZ production slows with its traditional slaughter season ending in September. Imports from Australia remain stable as they concentrate on shipments to the US, China and Middle East. UK exports declined over the first quarter by 800 tonnes year-on-year to 20,400 tonnes – mainly due to lower production and increased domestic demand. The EU has taken 95% of all UK exports so far in 2024. Looking ahead, our exports should be supported as the European Commission is forecasting by a 5% decline in EU production. However, lower domestic production means there won’t be the product to export and shipments are forecast to decline by 5% on the year.
With regards to consumption, the AHDB says combined retail and foodservice demand for lamb in the first three months of 2024 has exceeded initial expectations. Even so, pressures on household budgets, although getting slightly better, are expected to continue and a 1% decline in volume consumption is forecast, compared with 2023 and a 15% decline since 2019.
So what does all this mean for farmgate prices? The lamb price has been very strong over the first half of the year. Prices are currently seeing a seasonal decline as more new season lamb comes to market and consumer demand remains pressured due to the cost of living crisis. But imports are expected to slow as NZ production comes to the end of its season and, if domestic demand does weaken, exports to the EU, where production is falling, presents an opportunity. The result being an expection that prices should remain buoyant over the year. The finished lamb SQQ p per kg deadweight price is tracked in our Key Farm Facts.