Wednesday, July 6, 2022

UK sheep farmers face same problems

New Zealand’s sheep industry might think it is struggling with volatile pricing and inconsistent supply chain but a United Kingdom farm leader reckons his country has it just as bad.

Just like in NZ, and even more so, farmers in the UK sent their lambs for processing when weather and feed conditions had them ready, rather than committing to a processor or retailer to allow them to plan ahead, EBLEX director Nick Allan said.

About 50-60% of UK lambs were sold through auction, he said, a much higher ratio of non-commitment to a processor than in NZ.

When too many arrive at the market at once, which happened a few weeks ago in a heatwave, prices can tumble. 

EBLEX is the UK’s equivalent to Beef + Lamb NZ and a working party trip to NZ had already been planned, partly in response to higher-than-usual volumes of  lamb arriving in the UK last northern hemisphere winter as NZ exporters tried to sell down high inventory levels.

That put downward pressure on lamb prices across Europe and gave the group members a lot to talk about with their NZ counterparts.

“The biggest problem is volatility and we need to be able to manage that. A shorter supply chain and working closer together with the people we buy and sell on behalf of would help do that. We need to change behaviour, not to control the market but to bring more order to it.”

Nick Allan

EBLEX

If the industry could manage the volatility by its various parts working closer together, the future should be bright, Allan said.

He was excited about mainland China’s emergence as a major market, for NZ at least, and was pleased it had taken some of the pressure off supplies going to Europe.

After a series of meetings with farmers and processors, it was clear the NZ and UK industries shared similar problems, he said.

“The biggest problem is volatility and we need to be able to manage that. A shorter supply chain and working closer together with the people we buy and sell on behalf of would help do that.

“We need to change behaviour, not to control the market but to bring more order to it.”

The industries were speaking the same language but putting action to that was a bigger challenge.

Both countries would have lower lamb numbers in their next processing season than in the past season and short supply would mean higher prices, he said.

Lamb was already the most expensive meat protein but Allan, a Hampshire farmer, said the market would be more balanced over the next 12-18 months than a couple of years ago, when price levels ran into consumer resistance.

The UK did not have access to China but was working towards it, he said. He has been there twice in the past year.

“I’ll be cracking open the champagne if we get it in the next three years.’’

He thinks a three to five-year timeframe might be realistic.

The UK had to convince China its history of bovine spongiform encephalopathy (BSE) – commonly known as mad cow disease – was behind it, he said.

It had got access to Hong Kong, a strong market, which was second only to France for the UK.

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