Scarcity boosting sheep prices but it is no long-term solution
Some years ago, I discussed world sheep prices with some New Zealanders. I glibly suggested that the best way to lift New Zealand and world sheep price was to sink a couple of the boatloads of New Zealand lamb en route to Europe. The resultant shortfall of lamb on the EU market would have lifted prices for both European and New Zealand sheep producers.
A significant shortfall in delivery of New Zealand sheepmeat into the EU eventually happened in 2010/2011. It has helped deliver a massive boost to lamb prices in both Ireland and in New Zealand.
Happily, the shortfall did not result from sinking ships. It came from lower NZ production and from competing markets taking the Kiwi sheepmeat away from the EU.
Another positive outcome from this is that the penny is beginning to drop in New Zealand concerning the laws of supply and demand. After 40 years of slavishly striving to fill their EU quota, a Kiwi farm leader recently remarked: "Maybe not delivering on our full 228,000t EU quota can be a good thing."
The good Irish sheep trade of the past two years has been driven purely by scarcity. Sheep numbers have crashed everywhere. In Ireland, they are down from 4.6m to 2.6m ewes, in Britain from 18m to 13.8m ewes and, possibly most dramatically, in New Zealand from 70m to just 34m sheep.
But depending on ever-shrinking production to support farm prices is not a long-term recipe for viable sheep industry.
Consumption, too, is under pressure. Promotional support helped minimise consumption drops in Ireland and France but the British supermarkets stood back and let sheepmeat consumption collapse last year by 20pc.
In 2011, new customers for Irish lamb opened up in Sweden, Belgium and Germany. These came directly from the shortfall of New Zealand lamb. It's a mirror image of the gaps being made for Irish beef in the EU due to the absence of Argentine product.