At today’s (Friday, January 15) Bord Bia Meat Marketing seminar, a positive outlook for the Irish sheep sector in 2021 was forecasted.

Bord Bia’s sheep and livestock sector manager, Seamus McMenamin, said tight supplies from major export players in the sheep market globally should mean that the sheep trade at home should remain strong at least for the first part of 2021.

Looking back on the year gone by, Seamus had the following to say: “It has been a very positive year for the sheepmeat sector here in Ireland. Production has increased by 3% and throughput has increased from 2.8 million head to nearly 2.9 million head.

“This was primarily driven by the increase in lamb/hogget throughput. This higher throughput was driven mainly by an increase in hogget throughput in the first quarter of the year and an increase in imports from Northern Ireland.

In quarter three we also saw a large throughput of lambs, with many producers deciding to kill lambs earlier and at lighter weights than previous years in response to a very strong factory trade.

“In the final quarter, supplies tightened due to lambs being moved earlier in the year and due to more ewe lambs being retained for breeding, as well as that, there was a sharp drop in imports from Northern Ireland, as there was a strong trade seen there and this meant there were less lambs available for export to meat processing plants in the south.”

‘12% increase in the value of Irish exports’

Seamus went on to talk about the positive factory prices seen for lambs in 2020 and also the increase in the value of Irish exports as well.

He added: “There was a strong deadweight trade throughout 2020. There was a slight dip in March due to Covid-19 but that quickly recovered as retail demand increased domestically and abroad in key export markets.

“The average lamb price in 2020 was €5.24/kg – up 48c/kg from 2019 or a 10% increase. It’s also important to look back to 2018, where prices last year were up 20c/kg on that year.

Prices were driven primarily by lower availability in the EU market. There was a 3% decline in EU lamb production and a 4% reduction in the volume of lamb imported.

“So this created market opportunities for Irish exporters. A key factor was the volume of product coming in from New Zealand. It only used 46% of its export quota into the EU for 2020, which was the lowest it had been for decades. Furthermore, there was also a decline in the volume of UK exports.

“Overall, Irish sheepmeat export volumes increased by 4% to 75 thousand tonnes and the value of these exports increased by 12% to just shy of €360 million.

“The 4% increase in volume was driven by an increase in exports to the EU market. The value growth of these sales was driven by growth in value of sales to EU and non-EU markets. There was particularly strong growth from Switzerland.”

‘Tighter supplies forecasted from key export players’

Speaking about the key players in the sheepmeat market globally, Seamus said that China continues to dominate the headlines.

He noted: “One of the main drivers in the growth of the sheepmeat market has been China. It imported more than a third of the sheepmeat globally in 2020.

“However, demand for lamb in China is coming under pressure as pork production improves. So there was a drop off in import demand during 2020.

“Although, there have been signs that New Zealand is sending more product there lately, so that could be an encouraging sign for us here in Ireland going into 2021.

Then there’s the UK who is our biggest competitor on the EU market. There was a 12% decline in exports to the EU from the UK in 2020, which gave us strong opportunities in that market.

“They had an increase in domestic focus, especially from some of their bigger retailers, as well that they imported 10% less lamb, so they used more of their own produce.

“As well as that, the UK now faces additional costs when it comes to trading within the EU, despite avoiding the tariffs.

“Also, the UK’s national sheep flock declined by 4% in 2020, therefore, this coupled with a smaller carryover of hoggets into 2021, it is forecasted production will be back by 3.5%.

“Taking a look at New Zealand, overall, there was a decline in exports in 2020. There is some recovery expected in production in 2021 but not back to previous levels.

“There is some flock rebuilding and a poor lamb crop that are contributing to that lower output. So there is definitely scope for us to push on and take a greater foothold on the export market front.”

Outlook for 2021

Seamus said that, in the short-term, the carryover of hoggets into 2021 is going to be reduced by some 90,000 head to 550,000 head due to a higher number of lambs slaughtered in 2020 and due to higher levels of ewe lamb retention.

He said: “The strong prices at present may encourage producers to move on lesser-quality ewe lambs but still, availability will be reduced.

“There will be less imports from Northern Ireland, where supplies are also low and moving forward there’s likely to be an increase in the output of the sheep flock in 2021, because of an increase in the number of ewe lambs bred and a drop in ewe cullings.

The price prospects are going to be dictated by supply and demand and by the volume China takes off the market.

“It’s important to note that Ramadan and Easter are both earlier and within nine days of each other so there will probably be a strong demand around that period.

“The EU remains our priority market along with looking to displace the UK. As well as that, we are working on access to China and the US because they are big importers of lamb,” Seamus concluded.