Good year for sheep farmers predicted as demand boosts prices

STRONG global demand is bolstering prices for lamb and wool, promising a good year for Irish sheep farmers, according to IFA national sheep chairman James Murphy.

Mr Murphy said lamb prices are up about 11% on last year. He also described the wool and leather market as very strong. He said the value of the fifth quarter in Ireland was now worth the equivalent of 70c to 80c/kg on the price of lamb.

“Strong demand on both the domestic and export markets, combined with tight supplies and a significant increase in the value of the fifth quarter (hides and offal) are driving the trade,” said Mr Murphy. “The most recent retail data on lamb sales from the domestic market show volume sales up 1% and purchase frequency up 3% for the first quarter, compared with the same period last year. In the last year Irish shoppers have purchased €96 million of quality lamb. This points to a very strong and resilient domestic market for a top quality product.”

Mr Murphy said that this new air of confidence in the sheep sector was quite evident at the All-Ireland Sheep Shearing Championships in Kilkenny over the weekend. He said this confidence would be sustained at farm level and further growth could be driven from the sector, once the increase in lamb price is maintained.

The EU Commission is forecasting that lamb prices will remain high in 2011/12 and exceed 2010 levels. EU supplies or slaughterings are forecast to fall by another 1% to 868,000 tonnes. For the first time in decades imports from New Zealand fell by almost 30,000 tonnes in 2010 to 211,334 tonnes. In addition, the price of New Zealand lamb imports increased by almost €1/kg from the Jan/Feb period 2009 to 2010.

The Irish sheep sector has an output value of over €250m, with 40,000 tonnes of exports valued at over €180m.

The main export markets are France (21,000 tonnes), UK (10,000 tonnes), Germany, Spain and Italy.

There are 29,000 sheep farmers in Ireland with over 2.1 million ewes. The country’s nine major export meat plants process 2.3m lambs on an annual basis.

The latest analysis also points to a future export opportunity for the Irish sheep sector.

EU consumption of sheepmeat is expected to recover slightly by almost 1% to 1.17m tonnes.

Writing in the latest edition of Bord Bia’s FoodAlert, analyst Peter Duggan notes: “The latest forecast from the European sheepmeat forecast working group points to a slight easing in output for the EU-27 in 2011. In response to ongoing tighter availability of supplies, a slight recovery in sheepmeat imports is expected to materialize.”