Sheep farmers are gaining from an early taste of a possible Brexit halt to the annual cross-border imports of nearly 500,000 sheep from the North.
Numbers in Northern Ireland have fallen for the first time since 2013, ahead of the possibility of a no-deal Brexit cutting off access to the processors south of the border who buy about 50% of the North’s lambs.
The Brexit threat comes on top of a difficult 2018 lambing season in the North, which together have left the hogget lamb throughput in Northern Ireland processing plants for 2019 to date at 56,311, down 22% year-on-year, up to mid-March.
The scarcity has also reduced shipments south of the border for direct slaughter by 21%, to 69,194 head in 2019 to date.
Processing plants in the Republic are an important outlet for the Northern Ireland sheep sector, and have traditionally taken about half of the lambs produced in the North.
But, while the Brexit trend has hurt northern farmers, it has left southern farmers benefiting from the reduced supply of lambs from the North, and taking advantage of what IFA has described as a “solid” trade.
IFA National Sheep Chairman Sean Dennehy said this week the lamb trade had improved slightly, with farmers getting up to €5.60/kg (compared to €6.20 12 months ago), with lambs in very scarce supply. Ewes were making up to €3/kg.
He confirmed the national kill of 38,098 (week ending March 24) is down 31% year-on-year.
But the supply is likely to fall much further, if a no-deal Brexit completely stops the supply of lambs from the north.
World Trade Organisation tariffs would then apply to lambs coming south for slaughter.
The expected tariff for live sheep is €80.50/100kg liveweight. At about €35 per head, it would end the cross-border trade.
“A tariff of this level would effectively shut off this important market outlet for the Northern Ireland sheep sector,” according to the Livestock and Meat Commission for Northern Ireland (LMCNI).
Meanwhile, Northern Ireland’s Department of Agriculture, Environment and Rural Affairs has released the preliminary results of the December 2018 Agricultural Survey which indicated a 4% decline in breeding ewe numbers and a 9% decline in ewe lambs that were tupped, compared to December 2017 levels.
“This is the first time that sheep numbers in Northern Ireland have recorded a decline in the December Agricultural Survey since 2013,” according to the LMCNI.
This decline in the breeding flock is most likely a reflection of the current uncertainties being faced by the Northern Ireland sheep sector, and will go some way to offset any gains from reduced mortality on sheep farms this spring,” according to the LMCNI.
Despite the likely effect of a reduced supply from the North, Teagasc has estimated that a disorderly Brexit could cut southern sheep farm incomes by more than 20% (similar to the impact on dairy and tillage farms, but about half of the beef impact).
It could stop UK exports of lamb to the EU-27, thus removing Ireland’s main competitor on EU lamb import markets.
But the no-deal tariff proposals recently announced by the British Government include a full tariff on sheepmeat imports, designed to protect the UK’s home market.
That would cut off an important outlet for Irish exports.
The dependence of Irish sheep farms on CAP direct payments, and how trade with non-EU countries such as New Zealand is managed, could also have an important bearing on the overall outcome, if there is a disorderly Brexit.