TL;DR:
- GB deadweight SQQ lamb prices hit new seasonal highs in early 2024, driven by lower throughputs and strong retail demand post-Christmas.
- Estimated throughputs for the first seven weeks of 2024 fell by 4% from 2023, with a predicted 10% decrease in lambs carried over to the new season.
- Retail sales of lamb rose by 7.3% in the 12 weeks leading to January 21, 2024, buoyed by promotional activities and the popularity of leg roasting joints and added-value products.
In the first few weeks of 2024, the UK has witnessed a significant rise in GB deadweight SQQ lamb prices, reaching unprecedented levels for this time of year. The price for the week ending February 17 soared to 689.9p/kg, marking a notable increase and setting a new benchmark for January and February prices.
This price surge is attributed to a combination of factors, including a decrease in lamb throughputs and a robust demand in the retail sector. The Agriculture and Horticulture Development Board (AHDB) reported that estimated throughputs for the initial seven weeks of 2024 were 4% lower than the previous year, totalling 1.4 million heads.
This reduction is partly due to a forecasted 10% drop in the number of lambs carried over from the previous season, equating to around 400,000 fewer heads. Such a decrease puts additional pressure on domestic supplies, especially in the first half of the year before the arrival of new season lambs.
The retail landscape for sheep meat has also played a crucial role in driving up prices. In the 12 weeks leading up to January 21, 2024, retail volume sales of lamb climbed by 7.3% year-on-year, reaching 22,296 tonnes.
This growth was primarily observed in the four weeks preceding Christmas, with consumers showing a strong preference for primary lamb products, such as leg roasting joints, which saw a 23% increase in volumes purchased. Promotional activities, including significant discounts offered by retailers, were instrumental in attracting over half a million new shoppers to primary lamb, leading to a 7.4% rise in buyers.
Despite the positive trends, the UK’s recent entry into a recession poses potential challenges for lamb sales in the upcoming months, given its higher price point compared to other proteins. However, upcoming events like Easter and Eid al Fitr present opportunities for further demand, with expectations of strong promotional activities to boost sales.
The current market dynamics underscore the delicate balance between supply constraints and demand factors shaping the UK sheep meat market. With limited domestic supplies and potential peaks in demand on the horizon, the industry faces challenges in maintaining this balance throughout 2024.
