The Agriculture and Horticulture Development Board (AHDB) has said the sheepmeat sector will be “challenged” in the second half of 2024 after surging prices during the first six months of the year.
AHDB said the sector will be challenged by falling production and tight budgets impacting consumer demand.
A fall in the lamb crop impacting on slaughter levels of new season lambs is due to drive a decrease of 2.9% in total sheepmeat production for 2024, compared to 2023, according to the AHDB Agri-market Outlook for lamb.
The outlook also highlighted that, despite a strong start to 2024, retail and foodservice demand for lamb will remain pressured by consumer budgets with consumption set to fall by 1% compared to 2023.
AHDB red meat analyst, Isabelle Shohet, said: “As we highlighted in our outlook earlier this year, the sheepmeat sector will continue being put under pressure in the second half of 2024 with consumer budgets remaining tight and an anticipated reduction in retail promotion of lamb.”
Fall in imports
AHDB said domestic lamb prices may be supported for the remainder of the year by an anticipated fall in imports, coupled with further opportunities to export UK lamb to the EU.
“We are seeing a drop in prices at the moment due to the supply coming through of new season lambs,” Shohet said.
“We’ve also past the typical peaks of demand for the year like Easter which added strength to prices.
“Moving forwards, we are unlikely to see continued strong consumer demand we’ve seen in the first half of the year, and supplies will be higher as the new season lamb crop continues to come forward. However, prices will remain elevated when compared to recent years.”
Key findings in the latest update for lamb include:
- Total sheepmeat production is expected to fall by 3% to 278,000t in 2024;
- Retail and foodservice demand for lamb will remain pressured by consumer budgets despite the strong start to 2024, as consumption is set to decline by 1% compared to 2023;
- Imports have grown in the first quarter of 2024 but are expected to slow for the remainder of the year;
- Exports have seen a slight yearly decline in the first quarter of 2024 and are expected to remain in decline given our falling domestic production.
