An IFA lamb price survey of five national supermarkets shows that retailers are charging consumers from €10 to €16/kg for the key lamb cuts, while the farmer price has fallen from €5.50/kg to as low as €4.70/kg in the last two weeks.
This points to a 60% plus mark up on lamb by the retailers and factories over the farmer price according to IFA National Sheep Committee Chairman John Lynskey.
John Lynskey said farmers cannot take any more price cuts and current farm gate prices of €4.70/kg, with some factories quoting as low as €4.50/kg, are now below the cost of production.
He said this is not a sustainable position and farmers need a viable price for lamb, which does not involve subsidising the price from direct payments.
The IFA Sheep Chairman said the average retail price of lamb last year was €10.50/kg according to Kantar data and based on a 22kg carcase with a saleable meat yield of over 70%, this would return a retail value of €164 per lamb before the value of the fifth quarter. At a farmer price of €100 per lamb, the retail and processing gross margin is over 60%.
John Lynskey said factories are telling farmers that retailers are putting pressure on them to push down prices at farm level. He said this has to stop and retailers need to review their pricing policy and return a fairer share of the retail price to farmers, which covers the cost of production and leaves a margin.