The Irish sheep sector has had an unprecedented start to 2021. A firm demand for Irish sheepmeat on both the domestic and export markets combined with extremely tight supplies for processing have been key factors in taking the deadweight trade to new heights.
Hogget throughput in Irish processing plants during 2021 to date was back significantly from year-earlier levels.
Higher lamb throughput during summer-autumn 2020, increased levels of ewe lamb retention for breeding and reduced imports from Northern Ireland for direct slaughter have all contributed to this downward trend.
Strong demand and prices around Easter and Ramadan encouraged some producers to push spring lambs to finish slightly earlier this year
Hogget throughput up to the week ending 23 May 2021 totalled 680,544 head, back 86,061 head from the corresponding period in 2020.
Strong demand and prices around Easter and Ramadan encouraged some producers to push spring lambs to finish slightly earlier this year. However, the unseasonably cold weather in May affected grass growth and lamb performance around the country, which has delayed finishing dates in some cases.
As 2021 progresses and lamb availability improves, deadweight prices are expected to come back in line with normal seasonal trends
While numbers have started to pick up, there has been a firm demand from processors for the lambs coming available and this has helped keep a floor under the deadweight trade.
As 2021 progresses and lamb availability improves, deadweight prices are expected to come back in line with normal seasonal trends. However, with the global availability of sheepmeat expected to remain tight, and reduced availability in the EU market in particular, prices are expected to remain relatively strong compared to previous years.
The average deadweight price for lambs and hoggets for 2021 to date (to week ending 23 May) was 691.9c/kg, significantly higher than the same period last year. Current lamb prices are trending 30% above the rolling five-year average as outlined in Figure 1.
The EU 27 continues to be our most important, and valuable, outlet for Irish sheepmeat.
During 2020, exports to the region were valued at €260m, accounting for more than 70% of total sheepmeat exports in value terms.
France is still the largest market in the EU for Irish sheepmeat, with exports accounting for 45% of all exports to the region in value terms last year.
There has been some important volume and value growth recorded in exports to other EU markets in recent years including Germany, Belgium and the Nordic countries, while opportunities in central and eastern Europe are continuing to develop.
Exports to other important markets in the Middle East and Asia were negatively affected last year by COVID-19 restrictions and the closure of food service on a global scale
While the EU is by far our largest market in both value and volume terms, there has also been some encouraging growth in some third country markets.
One notable example is Switzerland, where sheepmeat exports in 2020 were valued at €23.5m, up from €15.3m in 2019.
Exports to other important markets in the Middle East and Asia were negatively affected last year by COVID-19 restrictions and the closure of food service on a global scale.
However, exports to these regions have recorded a recovery in the early months of this year in terms of both value and volume.
A total of 16,000t of Irish sheepmeat have been exported during the first quarter of 2021, back by just over 12% from 2020 levels.
The marked reduction in processor throughput in the early months of this year due to the significant tightening in hogget supplies has negatively affected the availability of product for export.
However, the strong deadweight trade has meant that the value of exports increased by just over 7% year on year to €93.6m.
Sheepmeat exports to the UK were valued at €67m last year and it remains an important outlet for Irish sheepmeat, particularly for food service customers.
The level of export recorded some decline in the early months of the year in response to new trading requirements and the high deadweight prices, although the level of trade has gradually picked up.
Exports up to the end of March were back by approximately a third in both value and volume terms when compared to the same period last year.
While the UK is an important customer for Irish lamb exports, it is also our biggest competitor in key EU markets.
Further declines in both lamb production and export availability have been forecast for the UK in 2021
An increased focus, however, on the domestic British market for lamb resulted in a 12% reduction in the volume of UK lamb exports last year, which created valuable opportunities for Irish exporters in key markets.
Further declines in both lamb production and export availability have been forecast for the UK in 2021.
China has continued to drive the global sheepmeat market, with sheepmeat imports during the first quarter of 2021 totalling 123,460t, a notable increase from 99,378t in the corresponding period in 2020.
China’s demand for sheepmeat has removed a lot of sheepmeat from the global market and this, combined with reduced availability for export from both Australia and New Zealand, has markedly reduced the volumes of sheepmeat available for export to the EU.
Securing direct access to China and the US for sheepmeat remains a key priority for Bord Bia as both markets offer huge potential to the Irish sheepmeat industry.
There is ongoing engagement with officials in both countries in an effort to further progress market access.
Having full and free access to a wide range of international markets will future-proof the Irish sheepmeat industry and ensure we are not overly reliant on any one target market or region.
The strong deadweight prices for sheep in recent times has injected some positivity and renewed interest in the sector.
There were 2.64 million breeding ewes recorded in the December 2020 census, a 2.8% increase from December 2019 levels. This, combined with reports of good scanning results and low levels of lamb mortality this spring, should all contribute to a larger lamb crop.
However, despite the expected increase in lamb production, the outlook for the Irish sheep sector remains very positive, with firm demand for sheepmeat on domestic and export markets combined with tight supplies globally.
Historically, the greatest demand for Quality Assured lamb is in the Irish market. However, this is changing fast, with export markets now looking for Irish lamb from accredited farms.
The numbers of beef farmers participating in the Sustainable Beef and Lamb Assurance Scheme (SBLAS) accounts for over 90% of finished cattle annually. In contrast, 55-60% of sheepmeat comes from approximately 12,000 Quality Assured sheep farmers, from a total of around 35,000 active sheep farmers in Ireland.
Clearly there is significant room for increased membership among sheep farmers and addressing this deficit will enhance the marketability of Irish sheepmeat.
Crucially, demand from Quality Assured sheepmeat is increasing from both domestic and overseas markets
This need is called out in the draft agri-food strategy 2030, which specifically notes the importance of increased farmer participation in SBLAS in order to pursue a premium position for Irish beef and lamb.
Crucially, demand from Quality Assured sheepmeat is increasing from both domestic and overseas markets but it is essential that we have sufficient supply for trade customers.
In Ireland, all five retail chains require 100% of their fresh lamb to be Quality Assured.
Some existing customers in overseas markets who purchase Quality Mark beef increasingly expect Irish lamb to also carry the Quality Mark.
Furthermore, as complexity in trade increases between the UK and their EU customers, there are opportunities for Irish product to displace UK supply.
However, in cases where customers are sourcing assured lamb from UK suppliers, such as Red Tractor, they will look for equivalence from alternative suppliers.
Consumer demand for sustainably produced food continues to grow and retailers and food service operators are responding to this need.
Being able to prove that Irish lamb is sustainable gives the Irish sheep sector a competitive advantage in export markets.
Through the Sustainable Beef and Lamb Assurance Scheme, we can provide proof to customers that Irish sheepmeat is produced sustainably on farms that are certified members of an accredited sustainable assurance scheme.
The recently launched lamb carbon footprint model will assess the carbon footprint of Quality Assured sheep farms and provide further sustainability metrics to enhance the reputation of the sector.
Increased sheep farmer participation in SBLAS will add to the robustness of these metrics.
Increasing membership of SBLAS is a challenge the sheep sector must address if we are to secure new customers and markets, to maintain our existing portfolio of customers, and to enhance the reputation of the Irish sheep sector.
The Sustainable Beef and Lamb Assurance Scheme is open to all Irish sheep farmers.
Joining is simple and can be done over the phone. The average time from application to certification is four to six weeks.
Call 01 524 0410 to speak to the Bord Bia Helpdesk.