Falling lamb prices and rising costs are placing huge pressure on farmers, the president of the Irish Farmers’ Association (IFA) has warned.
Tim Cullinan said the “continual weakening” of lamb prices by factories when production costs are at an all-time high is not acceptable.
According to the IFA, sheep farmers have faced “a very challenging period” with factory prices currently running €1/kg behind last year’s levels but with no reduction in production costs.
“Input costs on sheep farms have increased in the past 12 months by over 40% and sheep farmers do not have the capacity to absorb this increase which has eroded the income levels in an extremely vulnerable sector,” the IFA president said.
He pointed to forecasts from Teagasc which expect sheep production to decline further this year and outline that prices will be “insufficient to cover the increased costs of production”.
According to Cullinan, forecasts for 2023 also suggest that feed prices will increase by a further 10% but there will be no corresponding weakening of fertiliser prices – which he said had increased by 195% on 2021 levels.
The IFA said all indicators point to other direct costs increasing by 4% in 2023.
Cullinan highlighted that latest market insights from Bord Bia also illustrate that there is a challenging market environment for lamb.
But he welcomed evidence that prices “in one of our most important markets”, France, have consistently held above €8/kg, and in some cases beyond €8.50/kg.
However, the IFA president has called on what he described as the “relentless downward price pressure” to stop and for a return of prices “to viable levels to provide confidence to sheep farmers to orderly market lambs over the next few weeks and months”.
Separately, the IFA sheep chair Kevin Comiskey has warned that he believes factories are imposing weight cuts on lambs in an attempt to flatten prices.
“This is sending negative messages to farmers committed to finishing lambs,” he has said.
In his opinion, sheep farming is becoming “increasingly unviable” and the Minister for Agriculture, Charlie McConalogue, has to date, failed to provide meaningful direct supports to farmers.
“There is real concern within the sector for the spring trade and action needs to be taking immediately to support farmers to maintain a year-round supply of lamb,” Comiskey cautioned.
The IFA plans to hold a public meeting for sheep farmers in Athlone on January 23.
The meeting in Radisson Blu, Athlone at 8:00p.m will feature presentations from Teagasc on the costs of production while Bord Bia will also give an update on the market outlook for lamb. Representatives from Irish Country Meats will also attend.