The US market is a net importer of sheep meat with domestic supplies accounting for 45pc of its annual requirements.
In 2015, some 83,000 tonnes of sheep meat was imported from Australia and New Zealand.
According to recent research undertaken by Bord Bia, it is estimated that the US market could be worth €15m to the Irish sheep meat sector.
UK and Brexit
UK sheep meat production in 2016 is expected to be only marginally up on last year, according to AHDB Beef & Lamb forecasts. A smaller carry-over from the 2015 crop led to lower slaughtering in the first half, while little change in this year's lamb crop will contribute to stability in lamb slaughterings during the remainder of 2016.
The breeding flock last December, at 14.6 million, was stable compared with a year earlier and little change in lambing rates is thought to have taken place as excellent conditions for tupping last autumn have been offset by the wet spring. The result of the UK referendum to leave the European Union represents a significant challenge to the Irish sheep meat sector where exports are worth €48m.
The UK is our second largest market for Irish sheep meat, accounting for just over 30pc of total exports (15,000 tonnes) in 2015. Regarded as an important market for culled ewes, a significant proportion of our exports are in mutton which is traded into a network of ethnic wholesalers as well as the UK manufacturing sector.
With some 90pc of UK sheep meat exports (90,000 tonnes) destined for EU, the outcome of Brexit could potentially lead to an oversupply of sheep meat in the UK market. This would dampen their imports demand, with New Zealand being most affected. In 2015, the UK accounted for almost 50pc of New Zealand EU quota fill of 174,530 tonnes.
New Zealand lamb production had been running ahead of the previous season's levels due to an earlier start, but the country is now running tight on sheep numbers.
By July, production was down 36pc on July 2015 to the lowest level for many years and supplies will remain very tight in the last two months of the current season.
These shortages are pushing up domestic lamb prices but export margins are under pressure as the New Zealand dollar strengthens against the euro. 2016 will be the seventh consecutive year that New Zealand will fail to fill their EU quota of 228,254 tonnes.
According to Beef and Lamb New Zealand, the 2016/17 lamb crop is expected to fall by 2.8pc or some 700,000 head to 23.3 million head.
This reduction is a result of 3.1pc decline in breeding ewes. As New Zealand enters its lambing season, the weather will play a significant role in lamb numbers.
The Chinese market is at last showing some signs of improvement as the previous high domestic supply situation and downturn in demand have eased.
Import demand is also improving as domestic stocks dwindled and Chinese buyers being more eager to buy from the world market.
Imports in the first half of 2016 were up by 12pc on a year earlier, at 95,700 tonnes, with New Zealand the main beneficiary given that it is not subject to any import tariffs now that the New Zealand-China free trade agreement has been fully implemented from January 1, 2016.
Higher pork prices have also contributed to higher demand for sheep meat although demand has focussed on cheaper cuts.
Meanwhile, according to the CSO's June 2016 Livestock Survey, the total number of sheep stood at 5.17 million, up 37,090 head (+0.7pc) on 2015.
While the total flock was up on the back of increased ewe numbers, up 19,700 head (+0.8pc), the number of spring lambs were on par with 2015 levels.
With a larger carry-over of hoggets into 2016 lamb slaughterings for the first quarter of the year were up by 6pc.
Conditions were ideal at the time of tupping and indeed during the lambing season, hence expectations were strong for a bumper crop.
However, a combination cold and wet conditions in April increased mortality rates whilst lamb thrive has been slow due to poor grass growth during the summer months.
Throughput of spring lambs for the year to date are back by 65,200 head (-7pc) on last year, therefore it is most likely that lamb numbers will pick up in the last quarter of 2016.
Declan Fennell is Sheepmeat Sector manager with Bord Bia
To learn more about market specification, outlooks and the Quality Assurance Scheme, visit the Bord Bia stand at the National Ploughing Championships - Block 3, Row 11, Stand 269