Irish sheepmeat production in early 2024 is expected to be bolstered by an extra 40,000 sheep carried forward from 2023 and production is forecast to decline in the latter half of the year, Bord Bia livestock sector manager Seamus McMenamin told a meat market seminar last week in Kildare.

The higher carryover prediction surprised many in attendance with some industry voices forecasting tightening numbers in the first half of 2024.

The Bord Bia calculation is influenced by lamb throughput falling by 75,000 head in 2023 due to inclement weather, high input costs and later lambing blamed for the reduced sheep kill.

McMenamin predicts a more positive trading environment in early 2024 which should maintain a strong floor under the trade if higher throughput forecasts materialise.

The positive tone from markets is already seeing lamb prices strengthening significantly since the turn of the year and running 60c/kg to 70c/kg ahead of the corresponding period in 2023.

Demand in key export markets is described as robust with more life also seen in domestic sales.

Production across the EU fell by 2.3% in 2023 and is forecast to fall by 1.3% further in 2023.

McMenamin outlined that high production costs and challenging weather witnessed farmers in key export markets moving to finish lambs younger and at lighter weights.

This reduced production potential leaves supplies significantly tighter heading in to 2024.

The year 2023, in the main, was viewed as presenting a challenging trading environment for sheepmeat.

Lamb prices

Lamb prices in Q1 2023 (€6.25/kg) lagged behind 2022 levels by 60c/kg with prices in Q2 (€7.37/kg) running 18c/kg lower.

The differential narrowed in Q3 (€6.39/kg) to 6c/kg while farmgate returns in Q4 averaged €6.37/kg – 4c/kg higher than the previous 12 months.

The high price point of sheepmeat and continued food inflation were highlighted as putting significant pressure on sales, while access to cheaper imports also put pressure on the trade.

Irish sheepmeat exports were steady in 2023 at 77,000t but their value fell by 7% to €440m.

A significant shift in the volume of sheepmeat exported in carcase form also limited the potential to maximise added value with approximately 40% of product exported in carcase form, up from 30% two years ago.

There was a strong finish to the year with lamb purchases increasing in key markets during the final quarter. Lamb occasion purchases increased by 14% in Belgium, 12% in Britain, 9% in Ireland, Sweden and Germany, 8% in Netherlands and 7% in Italy.

This has brought sales volumes back to 2021 levels with the exception of the UK (1% lower) and 2% to 5% higher in Germany, Ireland and Sweden.

2024 demand

Demand for sheepmeat in early 2024 is also expected to be supported by key religious festivals of Easter (31 March) and Ramadan (10 March to 8 April).

The one factor which could disrupt such market forecasts is competition from lower-priced sheepmeat imports from New Zealand and Australia, and continued higher imports from the UK.

Sheepmeat imports from the UK increased by 12% in 2023 with the sector there exporting higher volumes of high-value domestic produce and replacing this with lower priced imports. This is a continual worry for future years with UK trade deals allowing higher tariff-free imports from Australia over the next decade.

Longer-term forecasts

Sheep production levels are expected to potentially decline in the second half of 2024 with McMenamin outlining that continued contraction in the national ewe flock will reduce Ireland’s production potential.

He added that scanning operators are reporting higher barren rates and a lower litter size, both of which will reduce the number of lambs on the ground.

He also highlighted that the large number of farmers converting to organic farming will automatically cut productivity levels while an aging farming population is viewed as curtailing output levels in the coming years.

He was slow to offer a price prediction for 2024, but said the market dynamics look positive, particularly for the early part of the year.