Improved lamb prices essential to healthy sheep sector, warns IFA

THE future of the sheep sector, worth more than €400 million a year to the economy, is dependent on an improved return from the lamb price chain, as well as urgent action by the Government to deliver on commitments already given, the Irish Farmers Association (IFA) has warned.

IFA president Padraig Walshe said that the sector’s 34,000 sheep farmers, who produce 67,000 tonnes of sheep meat a year, are under extreme financial pressure. Lamb prices have fallen excessively in recent weeks.

A price of €3.50/kg, less than €80 a lamb, is at a similar level to what applied over 20 years ago. It is making sheep farming unviable and threatening the sector’s future.

He said a survey of the four main supermarket outlets last week shows that lamb is making an average of €284 in retail sales across the counter. But the prices received by the farmer for the same lamb is only €84, giving a gross mark-up before costs of €200 a lamb or 237%.

Mr Walshe said, based on the figures, it is clear the factories and retailers have cut lamb prices excessively to producers, but they could easily afford to pay in the order of €4.50/kg and still maintain a very good margin. He said Professor Frank Crosby, UCD, recently published figures to show farmers need a minimum price of €4.34/kg to break even in sheep production and €5.10/kg to make a net margin of €20 a ewe.

Mr Walshe said, to restore confidence at farm level, Agriculture Minister Brendan Smith urgently needs to remove obstacles holding back the payment of €34m, committed by the Government to the sheep sector last year.

He said the IFA has put specific proposals to the Department of Agriculture on the Rural Environment Protection Scheme (REPS) and the capital grant aid on sheep handling facilities and fencing that would facilitate this process.

Mr Walshe said 492 European Parliament members had endorsed a report prepared by Ireland East MEP Liam Aylward demanding urgent action to support the EU sheep sector. The report proposed the introduction of a sheep maintenance payment to recognise the positive environmental attributes associated with sheep production, to be co-financed by national and European funding.

Mr Walshe said it is essential that Mr Smith advances this proposal during EU discussions on the Common Agriculture Policy Health Check.