Farming News - ICSA: Factories using drought to push lamb prices backwards
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ICSA: Factories using drought to push lamb prices backwards
ICSA Sheep chair Willie Shaw has said drought conditions are putting sheep farmers under increasing pressure and giving factories an opportunity to push lamb prices backwards. "Farmers are running short of grass and that is forcing farmers to move some lambs earlier than planned. When those lambs are underfleshed, farmers are in a weak position and factories know it. They can buy them cheaply because they know the farmer has to do something with them," he said.
Continuing, Mr Shaw said, "We are used to factories taking advantage in August. Farm families are under pressure for cash at this time of year, but when you combine that with a serious lack of grass, it creates a perfect storm for sheep farmers. Farmers have fewer options and factories know it. The problem is that factories can see when farmers are under pressure and they use that to their advantage. That is not fair and it is not good for the sector."
He said the drought was also affecting the store trade, with traditional buyers unable to take store lambs. "The store trade is being hit as well. Farmers who would normally buy stores are holding back because they simply don't have the grass either. So you have lambs being moved earlier than planned, while the normal outlet for store lambs is also being restricted. That leaves farmers with very little room to manoeuvre."
Mr Shaw said the overall sheep throughput figures did not support any suggestion that the market was facing an oversupply of lambs. "Despite a couple of weeks where throughput has been elevated, overall sheep throughput is still down on last year. What we are seeing is drought forcing some lambs to be sold earlier than planned. That is a temporary weather-driven pressure. It doesn't mean there has suddenly been a fundamental change in sheep supplies. Factories know this pressure is being caused by drought, not by some sudden oversupply of lambs, and farmers are sick of these opportunistic tactics being used to drive prices down."