THE market outlook remains optimistic for English lamb, despite increased numbers in the finishing pipeline.

Jane Connor, Meat and Livestock Commission senior economist, said predictions for final quarter UK lamb slaughterings were more than 9pc up on last year, with 8pc more lambs forward for the first quarter of 2004.

This arises primarily from the recovery in the English flock since foot-and-mouth, and a 2.4pc year-on-year increase in the number of lambs being confirmed in the June census.

At the same time, the dry summer and poor pasture growth in many areas slowed up finishing rates, so slaughterings in the third quarter of the year were noticeably down on expectations.

As a result, a higher proportion of the 2003 crop than originally anticipated is set to come on to the market towards the end of the year and into the first quarter of 2004.

Even with increased marketings, the strength of demand for English lamb, underpinned by the continued recovery in exports and the far more favourable exchange rate, is predicted to keep prices relatively firm.

Although slightly fewer lambs were recorded in the June census than anticipated, across the UK as a whole, the increase in English supplies is expected to result in just over 3pc more UK lambs marketed this season than in 2002-3.

While England also saw a year-on-year increase of just over 2pc in the number of breeding sheep, the census revealed an overall decline in UK ewe numbers. This indicates a marked slowing in the post-foot-and-mouth national flock recovery, with only a marginal increase in the number of active UK breeding ewes forecast in the coming lambing season.

On this basis, the MLC analyses suggest the number of lambs available for slaughter in the UK over the 2004-5 season will increase by only about 3pc. At just over 14m head, this would still leave domestic production nearly 2m below pre-foot-and-mouth levels.

Despite favourable market conditions, English producers will need to finish and market their lambs carefully over the coming winter, paying particular attention to the quality of finish in view of this year's relatively poor forage conditions. UK feed grain prices are also £20/tonne above this time last year, combined with sharply increased world protein prices.