At €220m in 2014, the value of Irish sheepmeat exports is well behind beef and dairy. However, it is an important part of the rural economy and has potential to deliver more. Sheepmeat imports into the EU are more than four times Ireland’s total exports so there is a ready-made market waiting.

For markets outside the EU, we think of the US and China as key for beef and dairy, yet the Chinese have increased sheepmeat imports from New Zealand fivefold since 2008, from 31,000t to 158,000t in 2015. The USA bought 150,000t of New Zealand lamb in 2014, up from 140,000t the year before. There is huge potential for the sheep sector and it deserves to be put on the agenda in trade negotiations.

Although there are opportunities for the sheep industry, like beef, it has its challenges. Some are structural in relation to the lack of communication and trust across the supply chain, while inside the farm gate there are clearly technical efficiencies that can be grasped to drive profitability.

While starting from a lower base, the rate of genetic gain in New Zealand has outpaced Ireland. The initiative by Teagasc to import elite New Zealand Suffolk and Texel genetics to Teagasc Athenry and track their performance with elite Irish genetics is forward-thinking.

One of the key advantages sheep breeding has over cattle is that the life cycle allows for a much quicker shift in the direction, but there has to be an appetite to change.

There are many parts of the country that are only suited to sheep grazing and sheep offer the only practical way to utilise many upland areas for food production. Yet sheep can also succeed in the lowlands with the Teagasc profit monitor figures showing the sector can be every bit as viable as beef.

Nor should we ignore the valuable contribution that the mixed grazing of sheep and sucklers can make to driving farm productivity. Like the beef sector, given the scale of the typical sheep flock and the land type on which the production system is based, there is a strong argument for moving away from an across-sector profitability comparison on a per-hectare basis. Instead, we should establish a return on labour per hour deployed.

We are entering a critical time for the industry with a decline of just over 50,000 ewes in the last two sheep censuses after a period of recovery influenced by relatively strong market returns. How much further can prices increase and will further increases reverse this downward trend?

Processors will argue over the scope for further increases with farmers arguing that retail prices provide opportunities for greater returns. Lamb, like beef, is a luxury meat protein that ultimately competes with cheaper options such as chicken and pork, which are gaining market share – not only in relation to price but in the diversity of the product range and the drive towards convenience foods.

While we have seen the industry develop from selling whole lamb carcases to primal joints, we have not seen the level of product innovation that is a feature of the poultry and pigmeat sectors. Without diversifying the product range and tackling the issue of variability stemming from a seasonal supply curve, sheepmeat will struggle to push ahead on price without leaving the consumer behind.

This Saturday, sheep take centre stage at the Teagasc 2015 open day in Athenry. The IFA is once again using the event to call for direct support for the sheep sector. The need for such a payment was well established in both the Malone and Aylward reports. Its brief introduction undoubtedly contributed to a recovery in the national flock.

However, as the most recent census figures show, the decision to subsume the payment into the Basic Payment Scheme and break the link with production will clearly have an impact on the direction of the sector.