The recently released European Commission short-term outlook for sheep markets forecasts EU sheep production to fall by a significant figure of 1.2% in 2023. A fall of this magnitude is expected to help ensure a “high level of domestic prices” in 2023.

The lower production forecast is stemming from the size of the EU’s sheep and goat flock falling by an estimated 1.5m head in the December 2022 livestock survey. It is the third year where sheep numbers have fallen by in excess of 1m head.

The greatest fall is predicted in Spain, where the total sheep and goat flock reduced by in excess of 750,000 head in 2022. The number of ewes joined to the ram was estimated at approximately 10.4m head in December 2022, a reduction of over 420,000 head on the year previous.

As can be seen in Figure 1 the size of France’s sheep and goat flock also reduced significantly in the 2022/2021 season, falling by over 450,000 head.

The French sheep flock has fluctuated in recent years, with the number of ewes kept for meat production following a continual downward trend. In the region of 3.57m ewes were recorded in France in 2022, while the number of milking ewes increased by about 80,000 head to 1.57m head (total of 5.2m head).

Milk-producing flocks

As Figure 1 shows, there were also significant reductions in flock numbers in Italy, Greece and Belgium. Greece and Italy have significant dairy flocks and have witnessed significant reductions in ewe numbers in recent years in response to an escalation in input costs.

Like France, ewe numbers appear to have steadied in Greece and Italy, with ewe numbers provisionally reported as strengthening to the tune of 50,000 to 70,000 head and recorded at 6.85m and 5.94m head, respectively.

The one country where there is a big increase in ewe numbers is in Romania, with over 300,000 extra ewes on farms in December 2022. Romania has a substantial ewe flock of over 9m head but in contrast to Spain it is not typically identified in market discussions.

This is due to its lower output and the fact that its sheep processing sector is poorly developed, with the live export of sheep to north African countries the main route to market. The market forecast highlights, however, that Romania could redirect a growing number of sheep to the Greek and Belgian markets due to more favourable returns compared to north African markets.

Irish sector

The Irish sheep flock provisionally recorded an increase in its sheep flock. However, this is due to a higher carryover of hoggets, with the ewe flock estimated as falling by about 35,000 head to 2.65 ewes.

The market forecast states that the substantial reduction in flock numbers in recent years is hampering EU production, which fell by 0.6% in 2022. It raises the possibility of lower feed prices and better grazing conditions lifting year-on-year slaughter weights but even with this assumption, total production is still expected to fall by 1.2%.

Import-export dynamics

EU sheepmeat exports decreased by 6% in 2022. There were reductions recorded in sheepmeat and live exports. Many north African markets recorded reduced imports of live sheep in 2022. The exceptions were Jordan and Israel, where higher imports almost offset the decreases in other countries. The volume of sheep and goat meat exported in carcase form reduced by 3% to 102,280t.

The reduction in the volume of sheepmeat exported in live animal form stemmed from a marked change in the category of animals exported. The number of adult sheep exported in 2022 reduced from 1.81m head to 1.06m head while the number of lambs almost doubled, increasing from 907,000 head to 1.7m head.

EU exports of live animals is set to decline by 3.5% in 2023, with “high domestic prices and the continuing difficult transport situation through the Black Sea” highlighted as the main contributing factors. The net change forecast in 2023 is a 1% reduction in overall export volumes.

Contrasting forecasts

In contrast, EU imports could rise by an additional 8% in 2023. This follows a significant increase of almost 23% in 2022, with import volumes recorded at 156,045t. The main contributor was 25% more sheepmeat imported from New Zealand (total of 65,385t) while there were also increases recorded from the UK (76,358t) and Australia (5,944t).

The EU market forecast predicts that higher import volumes for 2023 will be influenced by ongoing reduced demand in the Chinese market and fewer “logistical challenges”. The forecast points to “more competitive UK and Australian shipments” as possibly putting some pressure on “high EU prices” with per capita consumption of sheepmeat expected to remain unchanged in 2023.