Controlling costs on sheep farms will be crucial this year as margins look set to tighten further, according to the Ifac Irish Farm Report 2023.
The report, published today (Thursday, February 16), shows that 11% of the 1,160 farmers who took part in the annual survey said that their main enterprise was sheep.
Three quarters of sheep farmers said that input prices was their biggest concern this year.
Just over half were worried about the impact of rules and regulations, while 30% said farm and family financial pressures were taking a toll.
Ifac report
According to the Ifac report, 51% of sheep farmers had a positive outlook for 2023.
However, it is important to note that the survey, which took place between last October and December, predates the price pressures faced by sheep farmers over recent weeks.
The current financial strain on sheep farmers led to a protest by the Irish Farmers’ Association (IFA) earlier this week in Co. Roscommon.
The Ifac report notes that the average price achieved by sheep farmers in 2022 was €6.83/kg, an increase of 16c/kg or 2% on 2021. This brings the five-year rolling average to €5.71/kg
Ifac noted that this price increase was needed to protect the viability of farmers against the backdrop of spiralling costs.
According to the survey, 32% of sheep farmers said that they are unsure if they will still be farming in five years’ time.
Half of sheep farmers do not have an up-to-date will, with one third saying that business viability was their biggest succession challenge.
Sheep farmers
The report noted that a reduction in throughput in 2022, combined with increased ewe numbers, indicates that a large amount of lambs born last year will be carried forward into 2023.
Ifac said that “the initial outlook is much cooler than the beginning of 2022” for the sheep sector and urged farmers to plan for the year ahead now.
Bord Bia has said that inflation is impacting demand for lamb in key export markets, with consumers looking for cheaper alternatives.
“Combine this with the backlog of 2022 lambs still to be sold, and it looks like it will be a tough start to the year,” Ifac said.
As a result, the report states that “efforts to reduce costs must be considered carefully”.
“A drastic reduction in fertiliser and feed input with no change to stock numbers will cause problems down the line through increasing the slaughter age of lambs and increasing demand for grass around breeding, which may hurt the prolificacy of the flock.
“Control of costs is critical for the year ahead. Farmers need to weigh up the significance of the slaughter age of lambs.
“If a reduction of inputs is needed, then the stocking rate must also be revised. Grazed grass is still the cheapest option despite fertiliser prices,” Ifac said.