The year 2021 will go down in the record books as a successful year for sheep farmers.

A late spring and weather-related challenges around lambing were more than compensated by excellent market conditions, with prices for the year-to-date running €1.38/kg on average, or about €27 per head, above the corresponding period in 2020 in Ireland and a similar level in Northern Ireland.

The challenges which lie ahead in terms of an escalation in fertiliser costs and rising concentrate prices have led Teagasc to forecast a 15% reduction in the gross margin of lowland sheep enterprises at €634/ha.

This lower gross margin prediction includes global sheep prices easing by 5% on 2020 levels, but this is estimated to occur from a historically high base.

All market projections for 2022 remain positive. Global supplies of sheepmeat are expected to stay tight, with production continuing to fall in many EU countries and New Zealand and Australia remaining firmly focused on the Chinese and US markets.

The sector will also be looking for the Department to build on the announcements in recent months regarding gaining market access to China and the US and quickly progressing to being in a position to start moving product.

Despite the positivity, it is unlikely that ewe numbers recorded in the 2021 sheep census will differ greatly, with stagnant breeding sales reflecting the low appetite for expansion.

Breeding performance and output should, however, be boosted by the strong grass growth rates, leaving ewes in prime condition for breeding and in the run up to lambing.

Reports of a slight increase in the number of farmers pulling lambing dates forward in an attempt to capitalise on higher prices in the first half of the year would normally lead to increased production.

However, lower fertiliser use could curtail lamb performance and push drafting back until later in the year.

Demand will be boosted again in 2022 by Ramadan (which starts on 1 April and ends on 30 April) and Easter Sunday (17 April) falling within the same month, while the Eid al-Adha (9 July to 13 July) is likely to underpin the highest demand for sheepmeat.