The latest figures for lambs processed to date were marginally higher than expected by the sector, but concerns remain over the overall declining lamb crop.
Defra's June survey has revealed that 12 million lambs were processed during the lamb crop year, between May 2023 and April 2024.
The department also said that a further 3.7 million lambs remained on the ground for slaughter within the lamb crop year.
However, whilst this confirms a slight increase, there are concerns as the total number of lambs processed during the crop year is 2.5% lower than the previous one and a further 5% fewer than the 5-year average.
Hybu Cig Cymru – Meat Promotion Wales (HCC) said, however, that it was pleased to see that that a few extra lambs came forward than initially anticipated.
"Record high farmgate prices may have encouraged more to come forward," noted HCC analyst Glesni Phillips.
"However, this may mean that producers have retained fewer ewe lambs for breeding, which could have implications on the breeding flock size further down the line.”
Ms Phillips added that this also raised concerns around overall available critical mass and highlighted wider potential implications.
If the current overall declining trend continued, there could be an impact for the wider rural economy, she warned.
"For example, Welsh processing plants employ 1000s of people – if throughput continues to decrease there may be plant consolidation across the UK with the risk of job losses in Wales,” she said.
Furthermore, she pointed out that demand was expected to increase on the domestic market, with another Islamic festival - Eid Al-Adha - on the horizon.
Ms Phillips said: “This may see favourable farmgate prices in early June and with an increasing supply on the domestic market as New Season Lambs come forward, we will hopefully also see import volumes level out."
