This increase came after extremely tight global supplies in 2011 sent prices to record highs and prompted a jump in output.
However, consumer expenditure on lamb in Europe has since remained roughly static and the higher volumes sold fetched lower prices per kilogram, EBLEX senior analyst Paul Heyhoe.
Mike Petersen, chairman of New Zealand’s trade body for beef and lamb, said average lamb prices were expected to drop by a quarter in the country this year.
“There is no doubt that with a soft market, and a number of carryover UK lambs from the wet winter, pricing has been softer than all of us would like,” he said.
The agriculture ministry forecast last month that average incomes for English farms with grazing livestock would fall by up to 52 percent in 2012-2013 to between ￡14,000 and ￡18,000.
The ministry cited lower sheep values and higher feed costs.
UK National Sheep Association chief executive Phil Stocker warned that if farm gate prices did not pick up within six months, 2 to 3 percent of the country’s 65,000 sheep farmers could decide to leave the business entirely, while a majority may shift activity toward crops, cattle or dairy.
“We could see the confidence that’s built up in the last two or three years come to a halt, which would be a real shame, especially when global signals are still fairly strong and when, for environment and landscape purposes, people are saying we need grazing animals,” he said.