It has been a relatively positive six-week period for sheepmeat market performance. Demand was underpinned by tighter supplies of hoggets coinciding with greater appetite, driven by the religious festivals of Easter and Ramadan. While prices fluctuated at times, analysis from Bord Bia shows the overall trend from mid-April to late May was an increase in price of 37c/kg, or a 19% increase on the corresponding period in 2019.

There is no doubt that if coronavirus market disruptions were not at play, it is likely that prices would have exceeded 2019 returns by an even greater level. For now, farmers are looking forward to the post-Ramadan period and querying what way markets are likely to perform in the weeks ahead.

Uncertain forecast

It is difficult to predict or forecast performance, as there are numerous factors, many of which are related to the coronavirus pandemic, that have the potential to significantly shape performance. The first is how markets respond post-Ramadan.

Factories have been cautious in their purchasing behaviour this week, with quotes falling by 10c/kg at the start of the week. There is also talk of further cuts – the June bank holiday is always a period where factories try and take greater control of the trade.

Factories have been cautious in their purchasing behaviour this week, with quotes falling by 10c/kg at the start of the week

The one factor benefitting the trade at present is that markets in other competing EU countries are also strong and supplies of sheep are relatively tight. Table 1 details latest prices reported across a number of key sheepmeat-producing countries.

As shown, the market in Northern Ireland is performing particularly well in comparison to the corresponding period in 2019 and this is also helping to keep a floor under the trade for sheep travelling from Northern Ireland to the Republic of Ireland for direct slaughter.

Increased competition

The global trading environment is more volatile, given the coronavirus-related disruption. In general, sheepmeat in Europe has not fared as bad as other competing red meats to-date, but further afield, the situation is much worse.

New Zealand sheep farmers have seen prices fall by €1.20/kg since the turn of the year. The country had become increasingly reliant on the Chinese market in recent years and while this created record volumes exported at record prices in 2019, it left New Zealand badly exposed to trading channels being cut off in recent months.

Thankfully, this price collapse has stalled in recent weeks and farmgate returns have recorded a small increase in the region of 5c/kg to 10c/kg. The collapse in price has led to New Zealand renewing its interest in the EU market, which could have negative effects in the months ahead. Trading channels with China appear to be slowly reopening and the hope is that this will gain traction and reduce the focus on the EU market.

Steady Australian trade

The trade in Australia has not been hit to the same degree. This is a result of exports to the US holding relatively well, with the US sheepmeat processing industry enduring the same major challenges that have blighted beef, pork and poultry processing.

In general, sheepmeat in Europe has not fared as bad as other competing red meats to-date, but further afield, the situation is much worse

Beef and Lamb New Zealand report in their latest market update that the second-largest sheep processing facility in the US has gone bust as a result.

Australia has also benefitted from a strong live and dead market to Middle Eastern countries. Falling oil prices have reduced purchasing power, but a strong focus remains on ensuring food supplies are not disrupted.

Domestically, the higher prices of the last 18 months are promoting flock rebuilding, following a prolonged period of drought. This is said to be increasing retention rates of breeding sheep.

Regular drafting

In domestic markets, the trade will be helped by continuing to draft lambs at the optimum weights in the weeks ahead. This will reduce the volume of meat coming onto the market and ensure the best quality product is available to compete in export markets.

Declan Fennell, Bord Bia, says that restrictions preventing consumers in key European markets from travelling to holiday destinations may help to hold demand in major cities.

The next marketing milestone on the sheep market calendar is Eid al-Adha, which takes place from 30 July to 3 August. The volume of sheep processed for the holiday was curtailed by beef factory protests in 2019, preventing processing of sheepmeat in Dawn Meats and Kepak Athleague. Other processing plants exhausted their processing capacity to meet demand, leaving throughput on a par to the highest weekly kills.

Restrictions preventing consumers in key European markets from travelling to holiday destinations may help to hold demand in major cities

Prior to 2019, Eid al-Adha underpinned the highest weekly kill for the previous five years. It is reasonable to expect a similar situation in 2020, provided there is no escalation of coronavirus in key export markets.

The other big unknown casting a shadow over markets in 2020 is Brexit trade negotiations between the UK and EU and what effect this may have on drafting patterns. A surge of sheepmeat onto the market in the latter half of 2019 led to huge downward pressure on the trade.

Northern Irish farmers are uniquely exposed in this regard, with almost 500,000 sheep exported live for direct slaughter in recent years, surpassing throughput in Northern plants.

Promotional activity

Bord Bia is intensifying its promotional activities to coincide with higher numbers of lambs coming onto the market at a time when markets are more vulnerable. The promotional campaign starts on 1 June and lasts until 21 June. It includes a three-week QA mark TV campaign.

This will be followed by two weeks of a co-funded EU Generic Lamb promotion called “Lamb – Try it, Love it” in July. This promotional wave includes social media activities and an outdoor advertising campaign (13-20 July) across Dublin, Cork, Limerick and Galway.

Goat numbers static at 8,774 head

A report on the 2019 Department of Agriculture annual sheep and goat census was featured on the sheep pages a fortnight ago.

The article gave an in-depth analysis on sheep numbers, but did not address part two of the census, which covers goats.

The number of goats on farms on 31 December 2019 was steady, with numbers increasing marginally by 113 head or 1% to reach 8,774 goats.

Census returns were received from 933 keepers registered on the Department database, with 689 of these possessing goats in December 2019. This represents an increase of 20 herds possessing goats.

The majority of herds are classified as non-commercial herds, with only 28 herds containing greater than 50 goats. These 28 herds contain a number of large-scale units, as detailed in Table 1, and combined account for 57% of the total goat population.

Country round-up

Cavan has the most goats per county and contains 880 head or 10% of all goats in 21 herds. This is followed closely by Westmeath, where 746 goats are run in 12 herds, while Meath is marginally lower with 722 goats contained in 23 herds. The county with the highest number of non-commercial herds is Cork, with 606 goats spread across 97 herds.

Mayo has 51 herds, possessing a total of just 270 goats, while Offaly has the lowest number of goats, with just 19 goats spread across eight herds.