Market trends

The main trends in the market are UK sheepmeat production falling by almost 5%, and French consumption anticipated to ease somewhat.

The Meat and Livestock Commission in the UK forecasts a fall of almost 5%, or 15,000 tonnes, in the volume of UK sheepmeat production during 2007. Import volumes look set to be maintained while tighter domestic supplies are expected to reduce the amount of sheepmeat available for consumption. Little change is forecast in export volumes, although much is likely to depend on the relative returns in the UK compared to export markets such as France.

A drop of 2% in the UK sheep flock in June 2006 is expected to reduce the 2007 lamb crop, and also moderate the level of cull ewe disposals. For the year as a whole, lamb supplies are forecast to fall by 4%, or 550,000 head, to 13.55 million head. The lower than expected carry-over to date could reduce this figure further. Most of the drop is anticipated from April onwards, reflecting a smaller lamb crop. In terms of cull ewe supplies, a drop of 14% is expected, to 1.94 million head.

UK sheepmeat production in 2007 is forecast to reach 314,000 tonnes, which is relatively similar to 2004 levels. Following a rise in 2006, the volume of sheepmeat imported into the UK looks set to be maintained at around 130,000 tonnes in 2007. However, much will depend on the level of demand in the UK, combined with the availability and competitiveness of New Zealand lamb on the European market.

UK consumer demand for lamb was relatively strong in 2006, with retail sales rising by around 3%, in volume terms. Consumption levels this year are likely to be affected by the reduced availability of domestic lamb throughout the year.

However, the strength of export markets is likely to play a significant role in determining the volume of sheepmeat available for consumption. Assuming relatively stable export markets, due to lower EU sheep supplies, the Meat and Livestock Commission anticipate a decline of almost 5% in the volume of sheepmeat available for consumption in the UK.

This would leave export volumes largely unchanged at 90,000 tonnes, leaving the UK as the principal supplier to the French market. With French consumption anticipated to ease somewhat, it is likely to result in a well supplied market throughout the year.