Productivity gains in NZ are proof that large gains are achievable

There are various limitations to the production of sheep meat: competition for land, degradation of grasslands, rising feed costs, labour shortage, and poor prices for the wool by-product.

However, global sheep meat consumption is rising, and demand is expected to grow further. China’s share in global sheep production is 26% (at over 2 million tonnes). China has dominated sheep production growth of the last 10 years, with sheep farming being profitable due to the high meat prices.

Speaking at the Agri benchmark Beef and Sheep Conference 2013 in York, England, earlier this summer, Peter Weeks, representing Meat and Livestock Australia, said “sheep prices continue to rise as supply struggles to meet demand”.

Decreasing stocking rates in vulnerable areas can provide an opportunity to increase both individual animal performance as well as land productivity.

Sheep production in New Zealand provides an example. Although there has been a gradual loss of pastoral land to dairy, with sheep numbers down 46% between 1990 and 2013, there have been large productivity gains where kg of lamb sold per ewe increased by 86% over the same time period, driven by higher lambing percentages and higher slaughter lamb weights. New Zealand may have 7% less lamb, but this represents a major productivity gain coming from 46% less sheep.

Lamb exports are worth almost NZ$2.3bn (€1.4bn). Britain tops export lamb receipts, equating to over NZ$500m, with second most important country being China to where NZ$342m are exported with the US falling from second to third place. Beef and veal are worth an additional NZ$2.2bn.

Developments on Ireland’s export markets largely determine the prices that sheep farmers receive for their output. Movement in the prices of competing meats (beef, pig and poultry meat) also have an impact on demand for lamb, both in Ireland and on export markets, and hence also affect the prices for lamb farmers receive.

Though continental EU markets account for the majority of Irish lamb exports, the UK market remains important, accounting for 28% of Irish sheep meat exports in 2012.

The highest proportion of Irish lamb exports are to France, being 47% in 2012, with a further 7% to Germany and 6% to Belgium.

Aggregate EU demand for lamb has been slowly contracting in recent years. Annual average Irish lamb prices for 2013 are forecast by Teagasc to be 4% lower than in 2012.

With increased volumes of lamb production, the decline in lamb prices in 2013 will be offset in aggregate at the national level by an increase in output volume. It is forecast EU production of lamb should increase slightly, due to expansion in Ireland and the UK and increasing imports of lamb from outside the EU.

There are 4.75 million sheep in Ireland, of which there are 2.5 million breeding ewes.

Huge potential exists for the Irish sheep industry, where the technical and financial performance of the top third of sheep producers can further inform and so reap better average performance for the industry in the longer term. The productivity gains in NZ sheep production are proof that such large gains are achievable for all.

As Carol Davis, senior analyst with EBLEX, concluded at the international conference. “The reduction of the difference between the top and bottom 30% performers constitutes a huge potential, even for so-called ‘developed’ countries.” This is also the case for Ireland.

* Anne Kinsella is an economist with Teagasc

© Irish Examiner Ltd. All rights reserved

Breaking Stories

Dispute with small Belgian region sees Canada walk out of trade talks with EU

Ireland 'splurging on UK imports' since fall in value of sterling

The NBA commits to showing games in virtual reality

DDoS attack knocks major sites, including Twitter and Spotify, offline


Movie reviews: Jack Reacher: Never Go Back, I, Daniel Blake, Queen of Katwe

Charlie Brooker's Black Mirror is reflecting reality

Meet the heroic children with Epidermolysis Bullosa described as 'the worst thing you could live with'

Ask Audrey has been sorting out Cork people for years

More From The Irish Examiner