So far in 2023, sheep farmers in Ireland have received a price for lamb that is 5% lower than what they were getting in 2022, according to a new report.
A mid-year assessment of the Situation and Outlook for Irish Agriculture for 2023 published today (Tuesday, July 25) by Teagasc showed these findings.
The focus on Irish sheep prices in the Teagasc report showed that while current prices are above the five-year (2018-2022) average price level, the average Irish lamb prices so far in 2023 are 5% lower than in 2022.
The Teagasc report states that “Irish prices have stabilised over the past few weeks. Annual average lamb prices are forecast to remain modestly positive for 2023 year as a whole”.
Despite positive EU production growth in quarter one (Q1), driven by earlier timing of religious celebrations, EU sheepmeat production is expected to decline by 1.5% in 2023, due to a lower EU sheep flock.
More sheepmeat imports from New Zealand (NZ) and the UK are expected in 2023 in the EU, due to favourable lambing conditions and high EU prices.
From January to May of this year, imports of sheepmeat into the EU from NZ are over 19% higher than in the same period in 2022, with imports from the UK being 14% higher.
EU sheepmeat consumption is to increase by 1.4% in 2023, according to Teagasc, which has reported that “EU heavy lamb prices for the year to date are 2% above the same period in 2022, but are forecasted to stabilise for the remainder of 2023”.
Sheep production
The Situation and Outlook for Irish Agriculture for 2023 report states that “for the period January to May 2023, the number of sheep slaughtered was almost 4% higher when compared with the corresponding period in 2022”.
28,300t of Irish sheepmeat were produced from January to May 2023, a 5% increase on the corresponding period for 2023, according to the report.
Despite this increase, it is forecast that overall Irish factory supplies will remain close to the 2022 level, and when combined with marginally higher prices, sheep output value is forecasted to remain modestly positive for 2023.
Production costs on Irish sheep farms are, according to Teagasc, “dominated by concentrate, pasture and forage costs”.
While the report states that “fertiliser prices have declined slightly relative to 2022”, in 2023 concentrate feed prices have been higher than in 2022.
Cost of production on Irish sheep farms is forecast to increase in 2023, in particular due to the escalation of feed prices.
Sheep farm income
Sheep farm incomes are forecast to increase by about 5%, to an average of €17,300 in 2023.
The increase in the incomes of sheep farmers, according to Teagasc, will be “boosted by payments under the new ACRES [Agri-Climate Rural Environment Scheme] scheme and additional income from cattle enterprises on these farms”.
For 2023, the Situation and Outlook for Irish Agriculture for 2023 states that “margins earned from sheep production are forecast to remain on par with 2022 levels, but down from the record levels achieved in 2021”.
The Teagasc report also stated that “the increase in average production costs will not be offset by output value changes”.
The average gross margin per hectare in 2023 is expected to remain level with 2022, at over €750/ha.