The EU lamb market continues to struggle in 2017, with household purchases down on year earlier levels in the key consuming countries. The market seems to be struggling from both a shortage of supplies and a lack of demand, and is a worrying development for the sheep sector. This is despite promotion campaigns being undertaken in the EU which includes EU funding, with the sheep-meat market continuing to lose price competitiveness compared to other meats.
Consumer panel data is available for the UK, Spain and France, which are the main consuming markets. The data available excludes the food service, although arguably it is less significant than in-home consumption.
The UK lamb market has underperformed compared to other meats, with volume purchases in 2017 to 18 June reportedly down 13 per cent year-on-year. Volume purchases of both leg roasting joints and lamb chops/steaks have been well down this year.
In Spain, household purchases in the first four months of 2017 have been down by as much as 10 per cent compared to a year earlier. This has been on top of the 4 per cent reduction on the year in 2016. Unfortunately for the sector, sheep-meat is the worst performer of all the meats.
The performance of lamb so far this year for France has greatly improved on 2016, when as a whole, volume purchases were down 4 per cent on 2015. Nevertheless, household purchases have been down nearly 2 per cent to 11 June.
Fortunately, supplies are tighter with quota utilisation by the two largest exporters of sheep-meat to the EU lower so far this year according to the latest data from the European Commission.
Data published covering January until early July shows New Zealand has utilised 41 per cent of its quota. Looking historically New Zealand usually would send larger amounts during the first half of the year when its own production is at a seasonal high and demand from the EU is also at its highest. Quota usage for the whole year could be as low as that in 2014, when only 68 per cent was used.
The New Zealand lamb crop has been at a 63-year low in the 2016/17 season. Overall the latest reports from the Ministry for Primary Industries in New Zealand suggests that slaughtering and production was well down in 2016/17, year ended June, compared to 2015/16 and will remain at lower levels in 2017/18.
Australia is the second largest exporter of sheep-meat to the EU. Historically it has utilised all or nearly all of its EU quota. In the period January until early July 2017, Australia also utilised just 41 per cent of its quota.
Overall, it appears less of the EU quota for sheep-meat imports will be utilised this year.