Lamb prices increased by 9pc last year and the prospects for 2012 remained positive, according to Bord Bia's Declan Fennell.
Despite falling consumption in the main markets of Britain and France, tighter supplies of both EU and imported lamb would help underpin the trade, he told the Meat Markets Prospects seminar in Dublin last Friday.
Sales of lamb were down 21pc in Britain last year and were also slow in France.
However, a sharp fall-off in New Zealand imports through the year meant demand continued to outstrip supply.
Total lamb production in New Zealand has fallen by 20pc since 2008, Mr Fennell said. And while output was expected to be 5pc greater this year, he said New Zealand would once again fail to fill its EU lamb import quota.
Part of the reason for this was increased New Zealand exports to the Middle East and China, with exports of Kiwi lamb to China increasing by 56pc to now total 39,000t.
In Ireland, there was a 3.5pc growth in sheep numbers in 2011 to 4.8m head. Throughput in the factories was 2.1m head, while exports of live sheep from the Republic were back 30,000hd (64pc).