Irish Farmers Association president John Bryan, made his remarks at the Clik All-Ireland and International sheep shearing championships in Portlaoise. He said exports, mainly to France, Britain, Germany and Spain, are worth €170m.
Provided the increase in lamb prices is maintained the sector can recover and grow at farm level, he said.
Mr Bryan said to date this year, lamb prices are running 10% to 15% up on last year. With the increase in the value of lamb skins and the change in sterling, this price increase must be sustained.
IFA Sheep Committee chairman James Murphy, said lamb prices should remain strong on the back of scarce supplies.
He said disposals are back 160,000 head to date this year, and 8,000–10,000 head per week below last year’s levels.
Mr Murphy said the allocation of an additional €500,000 in Bord Bia promotional funding will help tackle the challenging lamb consumption issues on the domestic market.
The €18m of unused CAP funds secured for the sector earlier this year is worth €10/ewe to most producers.
Mr Murphy said it is vitally important Agriculture Minister, Brendan Smith, and his department keep the impact of the new tagging arrangements including electronic identification to a minimum to allow the sheep sector grow from a decade of contraction.
On wool, he said the price prospects are much more positive this year. Recent sales in Bradford were cancelled because of a scarcity of product.
Noting that the Bradford wool price indicator has moved up to 120p/kg stg, equivalent to 140c/kg, he said Irish farmers, based on the strong market returns, should be demanding 90c-€1/kg for clean quality wool.
Ivan Scott, from Kilmacrennan, Co Donegal won the Clik International Open for the second time at the championships and also retained his Irish Open title.
He sheared 20 sheep in 15.54 minutes, in the international, with Gareth Daniels, Wales, in second place and Hamish Mitchell, Scotland, in third position.
Mitchell set an Irish record of 17.75 seconds for shearing a sheep against the clock in the novelty Speed Shear Challenge. Runner up was Willie Jones, from the North, in a time of 21.17 seconds.
The previous record was 20.3 seconds set in Kilkenny in 2002 by world champion David Fagan, from New Zealand.