You can have gold that is too expensive

The record lamb prices throughout 2012 resulted in a dramatic fall in home consumption, so much so that many consumers, without realising it, don't even look at lamb in the shops. It's perceived to be too expensive even to consider. This trend, coupled with greater New Zealand imports and a weaker export market through the difficulties experienced in the Eurozone, and the stagnant economies across the whole of Europe, has resulted in lower lamb prices than we have seen in January for many years and yet wholesalers still complaining of a complete lack in demand.

A dangerous cocktail exists of low prices but still an inability, it seems, to get numbers shifted. The market is stuck, logjammed.

Finished cattle prices and cull cow prices are at a record level however. This is supply-driven rather than demand-driven with again wholesalers and retailers alike complaining of a lack of shop demand and an inability to charge the true cost to the consumer. Much ducking and diving is going on just to try and get a margin into anything. Imports of beef are low. Home trade supply is low and the two together is perhaps giving us a false picture.

Many cattle came into yards in the autumn off grass in a poorer condition than normal as a result of a poor grazing season. Silage quality isn't as good as previous years, presumably as a result of a lack of sunshine and reduced sugar levels in grass. The two factors combined have meant many fatteners have found it difficult to "wind" their stores up. Farmers who would normally have been selling several finished cattle by now won't be really into anything for at least another month.

While beef prices look set firm because of supply, increased numbers on the market across the country as a result of seasonal factors must put downward pressure on beef returns. In some ways it may be in the long term good of everybody if this happens.

The mess which is the lamb market at present should be a lesson to us all. The majority of agricultural products have, at the end of the day, to be eaten by somebody and the perception of the consumer as to value for money is a potent force we all ignore at our peril.

* John Uffold is a partner in McCartney,s in charge of Ludlow Livestock Market