Hogget carryover of 50,000 to 60,000 head forecast for 2022

Bord Bia are forecasting the carryover of 2021-born lambs into 2022 to increase by in the region of 50,000 to 60,000 head.

This was reported by Seamus McMenamin, Bord Bia sector manager for sheepmeat and livestock at the Meat Market seminar held virtually on Friday 14 January.

Seamus said: “We do expect an extra 50,000 to 60,000 lambs to be carried in to 2022, which should help to stabilise supplies for slaughter. The proportion of ewe lambs which will be slaughtered will have an impact on supplies.

“We see last year’s lambs marked for keeping or breeding being killed in the run up to Easter with such strong prices, so that will also impact supplies.”

The level of imports from Northern Ireland are also highlighted as having a key impact on supplies, with the number of lambs/hoggets imported for direct slaughter in 2021 falling by 45,000 head.

Seamus also highlighted the potential of a higher lamb crop in 2022 going on a 4% increase in the ewe flock recorded by the Central Statistics Office (CSO) last June.

Prices prospects

In terms of price prospects, Seamus says the trade in 2022 is expected to hold pretty steady.

“We have seen a drop off in the quotes in just the last few days, but January tends to be a lower month for sales and export demand, so we expect that to stabilise.

“There is a modest recovery expected in global supplies and there is the potential for some New Zealand product to come back in to Europe, so it depends on what volumes are imported in terms of its effect on price.”

Seamus says it is also worth producers keeping in mind the strong link between lamb price and religious holidays and on what dates these take place.

The one thing to note is the reduced availability of sheepmeat

Looking further afield, Seamus says: “In terms of export prospects in 2022, China will continue to drive the global sheepmeat trade. We have ongoing opportunities to displace [lower volumes of] UK sheepmeat in the EU market and we have been very successful in doing that in the last few years.

“The one thing to note is the reduced availability of sheepmeat and how that could impact on consumption at an EU level.”

Progressing access to the Chinese and US markets offers significant opportunities to expand Ireland’s customer profile and bring greater balance to demand for all carcase components.

Seamus also outlined that there needs to be a continued focus on growing the percentage of quality assured lamb produced.

This currently stands at 60% and there are more customers enquiring as to the quality assurance status of lamb in the marketplace.

Global sheepmeat markets have enjoyed a significant upturn in fortunes in 2021. Irish farmgate lamb prices increased by 27% (€6.67/kg) and UK prices rose by 28% (€6.85/kg), while higher global prices are reflected in New Zealand prices increasing by 20% (€4.87/kg).

Much of the global developments in 2021, and indeed progressing in to 2022, can be attributed to the Chinese market. Seamus outlined how China accounted for some 42% of all sheepmeat traded globally in 2021. Sheepmeat consumption has increased in China by 9% since 2018 due to the African swine fever (ASF) outbreak but also by availability improving via increased imports.

China accounted for a massive 62% of New Zealand sheepmeat exports in 2021, up significantly from 51% in 2020. This key redirection in product away from the EU market in recent years has had positive market implications for European farmers. To put the scale of the change in perspective, New Zealand exports to the EU in 2021 accounted for just 10% of total exports, with the country utilising just over 40% of their tariff-free EU quota.

Seamus said there is expected to be some growth in domestic sheepmeat production in China, stemming from genetic improvements in the country’s sheep flock, but this is not forecast to have any negative effects on their level of sheepmeat imports.

Australian flock recovery

Australia is the only country globally which is predicted to significantly increase sheepmeat production. This follows sheep farmers moving to rebuild flock numbers following years of drought conditions, with increased prices fuelling this recovery.

China has developed as the primary market for Australian lamb exports, accounting for 37% of their sheepmeat exports in 2021.

Exports to Middle Eastern and North African nations (MENA) were affected by the coronavirus pandemic, reducing demand and decreasing volumes exported from 17% in 2020 to 11% in 2021.

Continued growth in the US market compensated for this, with export volumes increasing from 18% to 20%, while exports to Southeast Asia also increased by 1% to 9%.

A strong recovery is expected in 2022 to pre-pandemic levels, with per capita lamb consumption also expected to bounce back

Looking briefly at prospects in MENA, Seamus says that food service accounts for over half of total consumption in this region, so the effect of pandemic restrictions and in lower levels of tourism hit demand hard.

A strong recovery is expected in 2022 to pre-pandemic levels, with per capita lamb consumption also expected to bounce back. If this materialises, it will help account for increased production in Australia.

The US market is also expected to continue to record an increase in consumption in 2022. This is occurring from a low base and there are huge opportunities to grow sheepmeat sales. US domestic sheepmeat production reduced to 62,000t in 2021, while import demand increased by 10% to reach 138,000t.

Looking closer to home, Seamus outlined how developments in the UK market in recent years continue to have significant connotations for Ireland. The UK has traditionally been Ireland’s largest competitor on the EU market, with prices here sensitive to trade fluctuations.

The dynamics of the UK sheepmeat market have changed significantly on the back of higher volumes of New Zealand sheepmeat destined for the Chinese market, a refocus on servicing domestic demand and Brexit-related uncertainty linked to reduced production.

UK sheepmeat production has been trending 10% lower throughout 2021, with export volumes to the EU falling by 21% in the period January to October 2021.

The UK sheep flock was estimated to be 2% higher in June 2021, but these estimates do not tally with production figures and all eyes are awaiting results of their December livestock survey.

Speaking at the Meat Market seminar, Sinead McPhillips, assistant secretary, Department of Agriculture, Food and the Marine, was upbeat regarding progressing sheepmeat market access to the US.

“Last month it was announced that the long standing ban on EU sheepmeat exports has been lifted, which removes a major impediment to the export of Irish sheepmeat to the [US] market. We are now engaging with the USDA on the next steps to full access including finalising an export certificate so some really positive progress there towards opening new markets for the sheepmeat sector.

“Last September, Minister McConalogue and Minister Ni Yuefeng signed formal protocols on the requirements for eligible product, which will pave the way when a number of further technical steps are completed for the export of Irish sheepmeat to China to commence.”

Regarding the Department’s agenda for trade missions in 2022, McPhillips said: “As Minister McConalogue announced this week, our trade mission agenda for 2022 is planned around the following priority markets.

In April, there will be a trade mission to the US and Mexico and for the autumn and winter

In February, Minister McConalogue, along with Minister for State Martin Heydon, will lead a trade mission to the United Arab Emirates and the Kingdom of Saudi Arabia. In April, there will be a trade mission to the US and Mexico and for the autumn and winter, a number of trade missions are planned to key Asian markets.”

It is hoped that these trade missions will take place in person, but this will depend on the prevailing pandemic conditions at the time of each mission and the format of each will be adapted to suit.

Given the increasing volumes of sheepmeat being imported by both the Chinese and US markets in recent years, progressing market access to a stage of starting to export product would be a major positive for the industry and pressure must be maintained to achieve this.

Irish sheepmeat exports experienced record performance in 2021. The value of sheepmeat exports increased by 15% to €420m, despite export volumes reducing by 9% to 69,000t.

Seamus McMenamin said that final export figures for 2021 are not available yet, but advanced estimates point to strong performance.

The value of EU exports grew by 15%, with some individual markets recording an increase in sales value to the tune of 42%.

France remains Ireland’s number one market for both export volumes and overall value, with 2021 sales value estimated to have increased by 9% to over €128m.

The performance in high-value markets such as Germany, Sweden, Belgium, Denmark and the Netherlands continues to reach new heights, with the German, Swedish and Belgian markets growing in importance year-on-year.

The Danish market is estimated as recording the largest percentage increase, with export values rising by 42% to €16.2m

The value of exports to the German market increased by 40% to €59.8m, while export values in the Swedish market increased by 22% to just over €40m and in the Belgian market by 28% to €36.7m.

The Danish market is estimated as recording the largest percentage increase, with export values rising by 42% to €16.2m.

Italy had been an important market for many years, but export volumes collapsed with the demise of the light lamb market almost a decade ago. The market has, however, been steadily growing in recent years and in 2021 recorded a 14% increase in sales value to reach €11.9m.

The Netherlands accounted for sheepmeat exports worth €10.1m in 2021 and this equates to an increase of 40% compared to 2020 levels.

Seamus said that growth in non-EU sales was driven by exports to the United Arab Emirates, Switzerland, Philippines and Singapore. Higher prices across the globe were underpinned by tighter supplies and solid market demand.

Production in the EU did increase marginally by 1%, but import volumes fell by 18%, owing to reduced imports from the UK and New Zealand.

There was also welcome increases in farmgate prices with the average lamb/hogget price in 2021 recorded at €6.67/kg, up €1.43/kg or 27% on 2020 levels. A significant tightening in Irish production contributed strongly to this increase in price, with the annual sheep kill falling from 2.88m head in 2020 to 2.72m head in 2021.

Ewe and ram throughput reduced by 8%

The fall in throughput was primarily driven by lower throughput in the first half of 2021, with 12% fewer hoggets slaughtered.

Ewe and ram throughput reduced by 8%, while the lamb kill reduced marginally by 2%. Reduced imports from Northern Ireland contributed significantly to reduced hogget throughput. Overall, the number of hoggets/lambs imported for direct slaughter from Northern Ireland fell from 314,000 head in 2020 to 269,000 head in 2021.