Sheep Matters - August/ September 2017

4
AUGUST & SEPTEMBER 2017
Making sense of liveweight and deadweight pric
Focussing on price
alone misses the bigger
picture.
Can you afford to just focus on
the income generated from lamb
sales and not consider the costs
and profitability of producing
those animals?
The way to maximise financial
returns to your business is to
produce and sell the type of lambs
that buyers want and are willing to
pay for. The most profitable farmers
match their production to market
demand by adopting appropriate
breeding, feeding and health
strategies.
‘Do you fully
understand the true
costs of producing
lambs that do
not meet market
specification?’
R3L
R3H
19 kg 19 kg
£83.94 £82.86
Deadweight marketing commentary
Moving beyond the third week of May, the data reported are for New Season Lamb from a sample of
abattoirs in Great Britain with 448,353 animals being reported during June and July. This represents
approximately 21.4% of the national stock being slaughtered during this period and is therefore indicative of
prices and quality being achieved.
The average price paid has continued to drop from the highs seen in early June with this SQQ price per kilo
now reflecting the price reported for the specific R3L category. Prices for conformation R and above, with fat
class 2 or 3L continue to attract a premium over the same shape animal with fat class 3H. This reflects the
continued demand for leaner types. Using our spot price, a typical 19kg carcass would achieve a price of
£83.94 at R3L versus £82.86 at R3H, obtaining a premium of £1.08 for the leaner animal. Can you afford to not
meet R3L or better specification?
Using our analysis, over the 13 week period of the current NSL marketing period, the premium paid for
producing the leaner lamb has averaged £1.35 per animal. Why would you not produce the leaner animal
to achieve this premium? What is the true cost (direct and indirect) to your business of producing the fatter
animal?