High sheep prices should continue into the coming year, as the favourable market conditions of the past two years have not diminished, according to Irish Farmers' Association (IFA) sheep chair Sean Dennehy.
“Demand for sheepmeat in China will continue to drive the global trade, as New Zealand and Australia focus on supplying this lucrative market. Consumption of sheepmeat in China has increased by 9% since 2018,” Dennehy claimed.
He outlined the effect this had on the EU supply, as less New Zealand lamb entered Europe in 2021, helping to increase prices.
Dennehy went on to state that prices should pick up in the short term, as he anticipates COVID-19 restrictions on food service industry to be relaxed.
He also warned farmers of the erosion to returns and selling opportunities when overfat lambs are fed on.
“Supplies will remain tight and farmers should move lambs as they become fit to maximise returns and maintain bargaining power with factories. Farmers feeding lambs ad lib should watch weights to avoid penalties,” he added.
Deals this week
Dennehy stated that deals were being closed this week at €6.90/kg to €7.10/kg, despite factory quotes averaging somewhere in the €6.70/kg to €6.80/kg mark.
It has also been reported that some processors have moved to place penalties on lambs going out of spec on deadweights this week.
Dennehy commented that these penalties on farmers’ lamb cheques were “unnecessary” and “short sighted”.