The weakness in the sheepmeat sector is mainly due to supply and demand issues on key Continental markets, Meat Industry Ireland’s (MII) Cormac Healy has said.

The Senior Director of MII (the association representing beef and sheep factories) said that reduced fifth quarter prices have also impacted on the sheep trade.

Since early April the Irish sheepmeat sector has weakened considerably, new season lamb prices have crashed from 600c/kg to 550c/kg last week. On a 20kg spring lamb carcass this is a loss of €10.

“The current market situation is characterised by weak demand for new season lambs due to price competition from other proteins,” he said.

Speaking at a meeting with IFA on Friday, the MII representative said that EU retailers are focusing on pork and many have yet to make the changeover from hoggets to new season lamb.

“In the important French market, in addition to the increasing preference for domestic product, Irish exporters are facing stiff competition from strong supply of local Lacaune lamb,” he said.

Healy also said there is a plentiful supply of Spanish lamb on the French market and a more favourable Sterling/euro exchange rate has given a competitive advantage to British lamb.

Extra New Zealand lamb available in Europe

Healy said that weaker demand in China has led to a renewed focus from New Zealand exporters on the EU market.

The MII Senior Director said that New Zealand shippers are targeting Northern European markets and there is evidence to suggest that they have used more of their export quota.

However, Healy said that UK lamb supplies will also be a relevant factor for both supply and demand.

The year to date has seen an average reduction in prices of just 1% on 2015.

“While acknowledging that market performance in recent weeks was very disappointing, it is hoped that markets changing over to new season lamb in the weeks ahead could help stabilise the situation, particularly as supplies increase,” he said.

The group representing sheep factories also said that market access to both the US and China are essential to broadening the international market opportunities for Irish sheepmeat in the medium term.