OLD season lamb prices have been far from spectacular for the first month of the year, but the industry has seen a wee bit of hope for the future over the past week, with values slowly but surely edging north.

January as a whole, saw the trade for lambs sold through the live auction mart down 30-40p per kg than throughout the same month in 2022, but with China re-opening, there appears to be an increased demand for product on the home and the export market.

Over the past week, prices have improved north and south of the Border, with those changing hands in Scotland last Thursday, averaging 224.3p per live kg – up 12.5p on the previous week and for a 93% increase in numbers.

On Monday, averages rose by 5.8p per kg to level at 235.4p for an additional 33%, with those sold on Tuesday in Scotland, cashing in at 229.8p, up almost 10p on the previous week, for an extra 0.7%.

Old season lambs sold in England and Wales have seen a similar trend. Last Thursday, they averaged 240.2p across the board – up a massive 17.5p on the previous seven days and for the same number. On Monday and Tuesday of this week, they levelled at 237.0p on both days, a rise of 4.0p and 3.3p for an extra 23% and 12.5%, respectively.

Add in a poor lambing in New Zealand which is expected to hit the Kiwi’s lamb production in the October 2022 to September 2023 season, and there is hope that UK prices will at least hold steady until Ramadan commences next month.

According to Beef and Lamb New Zealand, the lamb crop is estimated to have fallen by 2.6% on the year, which coupled with a 1.4% contraction in breeding ewe numbers, extends the decline in lamb numbers over an eight-year period to 15%.

However, slaughter statistics point to a strong start to the processing season, with the kill up nearly 13% year-on-year through October and November, driven by a return to a more normal marketing pattern after a delayed schedule in 2021-22.

Despite increased production and competitive prices, Beef and Lamb New Zealand trade data shows that in Q4 2022, New Zealand lamb export volumes fell by 2.6% compared to a year earlier.

Interestingly, sales to China rebounded by 14%, almost matching the highs of Q4 in 2019 and 2020, whereas the volume shipped to Europe fell by 17%, suggesting a rebalancing of activity.

In Australia, Meat and Livestock Australia are anticipating continuing recovery from drought in 2023, with good grazing conditions boosting producer confidence despite softer farm gate prices. The other side to reduced farm gate prices is export competitiveness which, coupled with higher availability and tight supply in New Zealand, this points to Australia’s lamb processors becoming more active in export markets in 2023.

However, Australia’s lamb shipments to the UK are restricted by a tariff-rate quota and, due to firm sales in 2022, any further increase in 2023 is likely to depend on the free trade agreement between the UK and Australia entering force and expanding tariff-free quota access.