Farmgate lamb prices are under pressure in Wales from reduced demand and high numbers of old-season lambs yet to be sold.

A new report by Hybu Cig Cymru (HCC) has provided little cheer for lamb producers; dry weather in 2022 led to lambs taking longer to finish, it says, and this will have repercussions for prices this year because a larger number of old-season lambs are expected to come to the market this year.

The UK mostly processes about 77% of the lamb crop by the end of the year the lambs were born in but by December 2022 that stood at about two-thirds.

It means that around 4.3m lambs are expected to come forward between January 2023 and April 2023.

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HCC analyst Glesni Phillips said that when compared to the 2021-22 lamb crop, this is a 13% increase - or 513,500 head - in the number of lambs left to be slaughtered, and an additional 25% when compared to the 2020-21 lamb crop.

“This would suggest there is a higher carryover of old-season lambs into 2023, which will likely apply pressure to farmgate prices,’’ she said.

Consumer demand may also be weaker. Data from market analysts Kantar show that volumes of lamb in the retail market fell by 17.9% year-on-year in 2022.

Even though average retail prices were up by 9.7% to £10.04/kg, total spend was down by 9.9%.

Ms Phillips said that, while demand for lamb over Christmas was good, the ‘January blues’ and the ongoing cost-of-living crisis is not helping consumer demand for premium proteins.

“There is evidence that consumers are looking to trade down at retail and cut back on eating out, so sluggish demand is not unexpected,’’ she said.

There was also significantly higher volume of frozen lamb imports into the UK during 2022.

Trade data from HMRC shows that, in the first 11 months of the year, the UK imported £181m worth of frozen sheepmeat from New Zealand, up from £88m for the same period of the previous year.

Frozen sheepmeat imports from Australia also grew by £17.6m to £46.4m during the same period.

This increase in imports had come at a time when Welsh lamb supply is itself higher than usual because of delayed finishing times caused by higher feed prices and the summer drought stunting pasture growth, said Ms Phillips.