The situation grew so bad that the four farmers' unions in the UK held an emergency "sheep summit" in London this week... though ironically sheep prices have started to move upwards fast as a result of improved exports.
Problems began with last year's appalling weather, which put back lamb development by roughly a month, so there was a lack of domestic lamb for the retailers from early autumn onwards. The gap on the supermarket shelves was filled by imports from New Zealand, keeping prices low. At the same time a strong pound against the euro put constraint on exports when lambs did become available.
The lamb price "fell through the floor", before it began to rise again this month, as sterling weakened and exports burgeoned. In fact in the past three weeks the deadweight price has risen by 25p per kilo and goes on rising, even though from a very low point.
With the main lambing season taking place, Westcountry shepherds are worried about the effects of Schmallenberg virus, a disease brought from Europe on midges, which has impacted hard on flocks. It causes ewes to abort or give birth to deformed lambs. Some flocks have reportedly lost up to 40% of their crop this year.
"Despite the troubling times, we believe there are grounds for optimism in the long term," said Ian Johnson, South West spokesman of the National Farmers' Union (NFU). "We know our lamb is in demand, both at home and abroad, but the industry must regain its confidence to invest in the future if we are to exploit these opportunities."
The sheep summit heard from French, Spanish and Irish farming unions, who outlined many of the same concerns. After the summit a joint statement from the NFU, and its Welsh, Scottish and Northern Irish counterparts, said: "Confidence in the sheep sector is at rock bottom. Factors such as the weather, rising costs and disease are contributing to make the perfect storm. We have committed to pull together to address the challenge farmers in countries across the EU are facing from cheap New Zealand imports and pressure on farm margins."
But some lambs were being produced at a loss, said the statement. The large carry-over of 2012 lambs will be the key factor driving a significant increase in sheep production this year, states the latest forecast from the English Beef & Lamb Executive. But there could be a decline in the current lambing rate – caused by Schmallenberg Virus, plus increased liver fluke, due to the wet weather.
