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Lamb prices “historically high”

SHEEP producers have been warned that while prices for lamb meat look healthier than they have for some time, there is no room for complacency.

Quality Meat Scotland’s head of economic services Stuart Ashworth told the National Sheep Association’s annual conference that prices had gone up due to slide in production in Europe, New Zealand and Australia.

Prices for producers should remain “historically high” due to quota and production restraints, but there remain challenges on the horizon, he said.
 
The cost of production could rise through increasing commodity prices, while consumer demand could shrink at the prospect of paying extra. The price of lamb rose by more than five per cent last year.
 
“In the longer term, and despite two spells of appalling winter weather within 2010, confidence amongst producers is better than for some time,” he said.

“Nevertheless, producer margins are still wafer thin and concerns over future policy reforms to both the single farm premium and LFASS could quickly damage this confidence.
 
“However, in the shorter term the basic supply and demand balance remains in favour of producers, the exchange rates continue to favour UK producers and there is little reason for producer prices to fall.
 
“Improved farm gate prices mean margins are better but with processor margins still under pressure and input costs rising the scale of the challenge to hold on to recent improved margins should not be underestimated.
 
“Producers have to take this opportunity to home in on their efficiency and ensure that they are well protected against future prices movements.”
 

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