‘EU sheepmeat output to remain stable but prices to fall in the short-term’

Sheepmeat and goatmeat production are expected to stabilise over the next 10 years in the EU, according to the European Commission’s Prospects for EU Agricultural Markets and Income 2015-2025.

However, it expects prices to drop in the short term due to world price developments, but this will be followed by a more positive medium-term outlook for both the sheepmeat and goatmeat sectors.

According to the EU Commission, the EU sheepmeat price follows the world price which is expected to show a significant drop in the coming years, but it expects it to improve near the end of the outlook period due to steadily growing demand in China and the Middle East.

The report suggests that the historic declining trend in sheepmeat and goatmeat production has declined in recent years, as a result of increased profitability on sheep farms.

This increased profitability, has occurred due to the combination of favourable prices and relatively good forage conditions in Member States not affected by drought.

The report suggests that sheepmeat production will stabilise at 930,000t, but it says that this level of production masks significant variation between member states.

However, despite EU production remaining relatively stable, imports of sheepmeat to the EU are expected to increase over the next decade.

These imports are set to remain within the tariff-rate quota as both New Zealand and Australia become more focused on other opportunities, particularly in Asia and the Middle East.

It also says that the expansion of the sheep flock in New Zealand will be limited by competition from the dairy sector which has a large requirement for pasture.

EU exports of both meat and live animals rose continuously between 2010 and 2013, but quantities remain relatively low, it says.

According to the EU Commission, these exports are expected to fall further in 2015 but will remain stable between 2015 and 2025.

Sheepmeat is also the least consumed meat in the EU and it accounts for only 2.8% of total consumption or 1.8kg per capita in 2025, but the EU’s growing Muslim population may push consumption upwards.