Coronavirus has seen lamb prices fall by as much as 25 per cent, although there has been a steadying of prices. However, the 30,000 lambs sold last week was a fifth of the level normally sold at this time of year.
Sales of meat to restaurants and fast food outlets disappeared along with large parts of the export market that takes 25 per cent of UK production. The Rungis food wholesale market near Paris which deals with a large portion of the UK export trade is shut.
Rerouting meat to retailers is not easy as processors used to dealing with the food service industry lack the equipment to cut and package meat for retail. In any case, consumers are switching to cheaper meats such as chicken. Meat intended for more expensive cuts is being used for mince.
The National Sheep Association has called for deficiency payments to make up the gap between a baseline price and the market price. However, the budgetary cost of this policy instrument is always unpredictable.
Some have argued that the disruption to supply chains will give a higher priority to food security as many farmers would wish. However, attention is likely to focus on logistics rather than the point of production.
The sheep industry was already in poor shape before the virus struck. Many farmers also fear a no deal Brexit which could lead to the imposition of tariff barriers on their exports to European markets.
