Farmgate prices for lamb and beef have hit a new high over the first months of 2021.

The current average price of prime lambs in Wales is nearly 15 per cent higher than this time last year, and over 35 per cent above the five-year average.

Prime cattle deadweight prices have also held up well. The average for steers in England and Wales for the week ending March 13 was the highest since 2013 – up 14 per cent on last year – whereas the price of heifers and young bulls are higher by 13 per cent and 17 per cent, respectively, when compared to the same week in 2020.

Hybu Cig Cymru – Meat Promotion Wales’ (HCC) data analyst, Glesni Phillips explains that there are three main drivers behind the current prices: “A tight supply, both on the domestic and global markets, coupled with changes to trading patterns as a result of Brexit and Covid-19, and firm retail demand have all led to strong prices for livestock farmers.”

Slaughter data indicates a weak supply from the market. A higher proportion of lambs came forward during the May-December period last year as throughput figures were up 1.9 per cent on the year – a likely result of Brexit uncertainty and strong prices at the time.

This has taken its toll on the 2021 supply; there are fewer lambs available on the ground, resulting in a 13.5 per cent reduction in lamb throughput during January and February this year.

The supply of prime cattle during the start of 2021 has also been limited. According to UK BCMS figures for January, the number of cattle (excluding dairy females) aged between 12-30 months on the ground was down 5 per cent on the year.

Beef production figures for January and February reflect the tight domestic supply with production currently down 2.3 per cent compared to 2020. Looking further ahead, cattle aged between 0-12months (excluding dairy females) is up 1.5 per cent on the year, so there may be some recovery in supply over the coming months and into 2022.

“On top of the tight supply, trading patterns have also been disrupted by both Brexit and Covid which continue to impact the demand for red meat from the foodservice sector and export markets,” said Ms Phillips.

“It comes as no surprise that export volumes for beef, lamb and pork were substantially lower than usual at the start of 2021, with imports also down. January figures have been impacted by post-Brexit problems and also by unique issues such as pre-Brexit stockpiling and heavy domestic demand.”

In January 2021, total imports of red meat (including fresh/frozen and offal) to the UK fell by 41.5 per cent on the year whilst volume of exports was down 56.0 per cent.

Trade with Ireland, in particular, was disrupted and drove the decline for both lamb and beef imports in January, whilst imports of lamb from Australia and NZ were up 15.4 per cent and 12.8 per cent respectively compared with January last year. Germany and France are also significant, as the volume of exports to those key markets was also reduced.

In contrast, retail demand has been strong with the pandemic forcing the UK population to stay at home, drastically changing shopping and eating habits.

During the 12 weeks to February 21, spend on beef at retail increased by 15.8 per cent on the year to total £1.2billion, whilst volume grew by 12.7 per cent with new shoppers driving this increase in sales. Lamb also performed well, with spend at retail increasing by 12.7 per cent on the year to total £237million, and volume grew by 16.4 per cent.

Ms Phillips added: “The last 12 months have been unpredictable and we are unlikely to feel any sense of stability for quite some time.

“Market prices so far this year have been remarkably strong, but as restrictions ease and the foodservice sector begins to re-open, the trading landscape will undoubtedly change again. It is too early in the year to draw meaningful conclusions regarding red meat trade flows, but with time, we will feel increased confidence to trade with Europe again. In the meantime, domestic demand remains firm.”

For the most recent market prices, visit the HCC website: