It is predicted that the UK will increase its sheep slaughterings by 3% in 2014 to 12.86 million lambs as shown in Figure 1.

The forecast by Eblex and the Agriculture and Horticulture Development Board (AHDB) is based on a number of production factors. The first of these is recovery in the breeding flock. The estimated breeding flock in December 2013 increased 2% on 2012 levels to 14.5 million head. Improved conditions at breeding and very favourable lambing conditions are predicted to increase the lambing rate (number of live lambs on the ground) to over 122%. This comes after two difficult seasons, with the estimated lambing rate recorded at 117% in 2013 and 120% in 2012.

The last element of the increased estimated slaughterings is a lower than predicted fall in the 2014 lamb kill for the first quarter. For the first three months of the year UK sheep and mutton production has reduced from 67.9t to 65.7t or by 3.3%, lower than was initially thought. However, production is expected to recover quickly due to higher numbers of lambs born, favourable production conditions and resultant higher carcase weights, with total UK sheepmeat production forecast to rise 2.5% to 296,600t.

Increased UK production would normally be a negative for Irish farmers given that Irish exports compete head-to-head with UK exports for access into the French market. However, there are other factors at play that need to be taken into account. UK export capacity is also influenced by the volume of sheepmeat imports. The forecast predicts imports in 2014 falling from 113,200t in 2013 to 107,400 due to lower import volumes from New Zealand in particular along with tighter supplies from Australia and Ireland. This is predicted to leave sheepmeat supplies relatively tight, with the volume of exports forecast to fall from 109,200t in 2013 to 107,400 in 2014.

Flock numbers

Longer term, the forecast questions if recovery in the breeding flock will be maintained beyond 2014 and 2015. Flock numbers reduced in Scotland and Northern Ireland after two difficult seasons.

The report states that favourable market conditions will be required in the next 12 to 18 months to instil optimism into the sheep sector. It also suggests CAP reform is likely to lead to a reduction in sheep numbers unless increased market returns can compensate for lower payments.

French decline

The French sheep sector continues to experience considerable difficulties. In 2013 the French ewe and ewe lamb flock fell a further 3.1% to 5.53 million head. According to the Institut de l’Elevage, the decline was greatest in the southwest of the country. This has traditionally been the strongest area of production.

A factor indicated as contributing to the decline was a sharp fall in prices in the first quarter of 2013 combined with high production costs. This ongoing decline in the French breeding flock and reduced ewe productivity in 2013 (weather-related) resulted in lamb slaughterings falling by 3% to 3.68m head in 2013. In comparison, cull ewe slaughterings increased by 1% to 565,000 head, demonstrating the reduced confidence in the sector.

The fall in the breeding ewe flock in 2013 is set to lower lamb slaughtering further in 2014, with French sheepmeat production forecast to fall 3.5% or from 80,000t to 77,000t. The lower production forecast is unfortunately not predicted to stimulate increased appetite for imports. This is due to a continued worrying decline in French sheepmeat consumption, with provisional estimates showing consumption falling from 179,000t to 174,000t or by 3%.

The lower consumption is set in turn to lead to a reduction in imports from 106,000t in 2013 to 102,000t in 2014.

The UK is the country’s primary supplier of sheepmeat, followed by Ireland, New Zealand and Spain. As mentioned earlier, there are many factors to consider in predicting what impact lower French production, imports and consumption will have for Irish farmers. If imports from other competing countries remain high, it will lead to greater competition.

However, with most EU countries forecasting lower production, it will hopefully lead to steady demand for Irish sheepmeat. Growing demand in emerging markets such as Germany, Sweden, Belgium etc will also hopefully replace any shortfall in demand.

Sharp fall in NI imports

The number of sheep imported for direct slaughter from Northern Ireland (NI) in 2014 has fallen sharply when compared to last year’s levels. Weekly volumes have been running 15% to 25% behind 2013, with NI imports for the week ending 26 April falling from 171,309 sheep in 2013 to 125,156 sheep in 2014 or by 27%.

The lower imports have been influenced by tighter supplies in Northern Ireland and increased activity from Northern plants. To the week ending 26 April, there were 100,647 sheep and lambs processed by Northern processors compared to 79,386 in 2013. The ewe and ram kill is also running at 16,043 head compared to 13,000 in 2013. Stronger demand from southern plants in the last two weeks and Northern prices reducing to a similar footing to the South has seen imports from the North recover slightly, with records for week ending 26 April 2014 showing exports exceeding 2013 levels at 4,549 compared to 4,150.

80% lift in Easter sales at SuperValu

SuperValu reports sales of lamb holding prime position over Easter. The retailer says sales volumes recorded an 80% lift when compared to a standard promotional week. It attributes the spike in sales to its policy of sourcing 100% Irish lamb and consumer demand for produce, especially at seasonal times of the year. Sales were also helped by promotions surrounding new-season lamb. The retailer expects to sell €19m worth of lamb in 2014, or the equivalent of 132,000 lambs.