Sheep farmers look set to face another profitable year, but there is massive scope for improvement on farms, according to the Director of Teagasc Professor Gerry Boyle.

“There has been some improvement in lamb prices in recent years and a reduction in feed price, this would lead us to believe that 2016 will be a good year for the sheep industry,” he said.

Prof. Boyle spoke at the Teagasc National Sheep Conference in Co. Wexford, where he said that the sheep industry has a key role to play in the Irish economy.

The sector creates a significant amount of employment on both farms and in the processing sector, he said.

“Sheep production is a significant contributor to the agricultural and national economy with an output valued at €242m in 2015.

The 34,000 flocks produce a high quality product, with about 75-80% of this exported.

However, Prof. Boyle said that there are major improvements that sheep farmers can make in terms of the efficiency of their businesses.

“Technical performance in terms of ewe productivity, grassland management, stocking rate and flock health are all important drivers of profitability.

“The average gross margin of Irish sheep farms in 2014 was nearly €700/ha, this includes a single farm payment of €216.

“The top 33% of flocks generated a gross margin in excess of €1000/ha, while the bottom 33% had a gross margin of a little over €300/ha.

“This points to the tremendous potential for improvement in the sheep sector,” he said.

Prof. Boyle also said that there is scope to increase the profitability on sheep farms by increasing both the stocking rate and the number of lambs weaned per ewe.

In 2014, only 30% of farms were stocked at above nine ewes per hectare. The average farm had a stocking rate of seven ewes per hectare and weaned 1.25 lambs per ewe.

He also said that the active participation in discussion groups will help farmers improve the performance of their farms through peer-to-peer learning.