Quotes from the major processors have increased to €7.90/kg with strong demand for hoggets on offer, particularly those that meet current market specifications. Throughput at approved processing plants has been steadily rising in line with demand, with 55,087 hoggets processed in the week ending 9 April 2022. This takes hogget throughput for the year to date to 654,219 head, an increase of 94,486 head or 17% from the corresponding period in 2021.
The higher level of hogget throughput is being driven by an increased carryover of lambs when compared to 2021. Hogget supplies last spring were particularly tight due to concerns around the impact of Brexit on lamb markets, with producers opting to kill lambs before the turn of the year. There was no such Brexit-related surge in the Irish lamb kill in the second half of 2021 and as a result higher numbers of hoggets were carried into 2022. This represents a return to more typical trading patterns in terms of supply.
Reports from the processors have indicated an increase in ewe lamb throughput in the last few weeks in response to the firming deadweight trade. Top prices for 23kg hoggets are now in the region of €180 per head and this will be prompting some producers to offload lesser-quality ewe lambs initially intended for breeding, particularly given that ewe hogget prices in the breeding sales last autumn were not as strong as expected.
Higher throughput is also being supported by higher levels of imports from Northern Ireland for direct slaughter. Up until the week ending 9 April, 77,148 hoggets were imported from Northern Ireland, up 17,774 head or 30% from the corresponding period last year.
As we move later into the hogget season, reports have indicated a sizable number of heavy lambs being presented for processing. There is a preference from the processors for lighter carcases as these produce cuts that meet the widest range of customer and market specifications. Producers are being encouraged to draft hoggets regularly and present them for processing once fit.
Small numbers of spring lambs have also started to appear, with 5,053 lambs processed so far this year. Spring lambs started being presented for slaughter two weeks earlier this year, with reports from the processors indicating that the lambs being presented are of very good quality. Spring lambs account for a small proportion of overall sheep throughput at present and are not expected to appear in any significant numbers until the beginning of May.
The Central Statistics Office has just released provisional livestock figures for December 2021 and these show continued growth in the Irish ewe flock. There were 2.78m breeding sheep in Ireland in December 2021, an increase of 55,000 (2%) from December 2020 and 132,000 (5%) ahead of December 2019 levels. The growth in the ewe flock combined with relatively favourable lambing conditions we have experienced so far this spring would indicate a larger lamb crop available for processing in 2022 and 2023.
The trade for cull ewes has been exceptionally strong, with record prices reported across the marts for well-fleshed animals. Despite the strong trade, ewe and ram throughput in the major processing plants has totalled 70,436 head for the year to date, slightly behind the 73,103 animals processed in the same period last year.
EU: declining sheep flock
While the ewe flock in Ireland has continued to grow, the opposite has been occurring across the EU, with most key lamb producing regions recorded a reduction in ewe numbers. According to the EU Short Term Outlook report (released in early April), EU ewe numbers contracted by 2.7m head (3.7%) in December 2021, taking them to their lowest recorded level since 1990.
In many parts of the EU, lamb production relies on purchased feeds and given the strong increases in input costs in recent months this is expected to contribute to higher numbers of sheep being processed, but at lower carcase weights. Overall, there is expected to be a 2% reduction in EU sheepmeat production in 2022, stemming from the smaller breeding flock.
While reduced production in the EU creates opportunities for Irish sheepmeat exporters, particularly in the absence of international imports, it also creates challenges. Lower availability of product results in higher retail prices, a reduction in dedicated shelf space and ultimately has a negative impact on consumption. As a result, the European Commission has forecast a 1.8% decline in sheepmeat consumption during 2022.
UK: some growth
The UK breeding sheep flock recorded a 2.7% increase in December 2021 to 14.5m head, an increase of 374,000 head from December 2020 levels. Improved deadweight prices have improved optimism in the UK sheep industry and this, combined with lower ewe slaughter figures, have contributed to the uplift in the size of the breeding flock. Similar to Ireland, there has been an increase in the number of lambs carried into 2022 to be processed in the early months of year as hoggets. The DEFRA figures for December 2021 indicate an additional 300,000 non-breeding sheep on farm when compared to December 2020 levels.
UK sheep export figures have recorded a firm increase for the first two months of 2022 on the back of additional throughput.
It is likely that the increased hogget carryover into this year combined with the growth in the breeding flock will lead to higher levels of sheepmeat exports in 2022.
Some challenging weather conditions have affected lamb performance in New Zealand this year. This, combined with reduced processing capacity due to COVID-19-related disruptions, has resulted in lamb throughput running 8% behind last year’s levels.
Forecasts for the 2021/22 season had indicated little change in slaughterings, which would point to strong numbers of store lambs still on farm to be marketed later in the year. No recovery in the New Zealand ewe flock from current low levels is expected, with ewe numbers actually forecast to decline by a further 1% in 2022.
Lamb availability for export in New Zealand has declined in line with the lower plant throughput. China remains an important market outlet for New Zealand. However, weaker demand in the market has seen its share of overall exports decline in recent months. Firm demand from other markets, in particular the US, has helped to offset this decline.
Total volumes of sheepmeat exported to the EU-27 have increased in the last few months, albeit from a low base. Strong prices in the EU are making the market more attractive to New Zealand exporters. However, the cost and logistics of transport remain key barriers to the trade. In contrast, trade has remained subdued to the UK in spite of high prices in the market and shortages of imported product.
Lamb throughput during the first quarter (January to March) of 2022 operated at similar levels to the same period last year, although throughput at processing plants is being slowed down by labour shortages because of COVID-19. Australian sheepmeat exports are trending higher in 2022 than the exceptionally low levels recorded in spring 2021 although they remain below the five-year average. Exports to China have declined in the early months of 2022 due to weaker demand in the region but also due to better options elsewhere. Exports from Australia to the UK have increased strongly early in 2022 at the expense of New Zealand product, with Australia now representing a major threat to New Zealand on the UK market.
Australian exports are expected to be much higher in 2022 as result of an expanding ewe flock and favourable production conditions.
EU beef and lamb campaign
The US market has been slow to develop for beef but with lamb close to final approval, Bord Bia believes this is a market that can be grown in the future.
Over the course of the next three years some €1m will be invested in an EU co-funded campaign to promote Irish and European beef and lamb in the US, targeting the cities of Chicago, New York and Washington.
The campaign “Working with Nature – European Beef & Lamb” is designed to support the realisation of significant market opportunities for Irish beef and sheepmeat exports in the US and deliver €11.7m of incremental growth in Irish beef (€9.3m) and sheepmeat (€2.4m) exports by 2024.
Bord Bia will target more than 350 key trade and decisionmakers and over 6,000 US buyers during the course of the campaign. Bord Bia will also welcome 15 US trade and media representatives to visit Irish farms and processors, to see first-hand our sustainable farming systems.
Do you want to learn more about topics such as soil health, greenhouse gases and water quality? Bord Bia offers free, online learning for Bord Bia farm scheme members. Seven online modules are currently available on the Farm Sustainability Learning Hub:
Visit farm.bordbia.ie to enroll in the Farm Sustainability Learning Hub.