Farm Ireland

Wednesday 21 February 2018

How sheep meat exports remain on an upward curve despite Sterling

Declan Fennell

Irish sheep meat exports for the first six months of the year reached 26,500t, a 19pc increase on the previous year.

Despite the weakness in sterling, the value of exports grew by 13pc to €143m.

The market diversification evident over recent years was largely maintained with over 45pc of shipments destined for markets other than France and the UK in 2017.

These high value markets such a Belgium, Germany and Sweden continue to outperform others both in value and volume growth. This year's average producer price (Jan - Sept) of €4.90/kg is marginally back by 11c/kg on last year largely due to an overhang of hoggets.

For the year to date a total of 806,000 hoggets were processed at Irish export plants, equivalent to an 18pc increase or an additional 134,000 head on the previous year.

This additional throughput in hogget supply had a downward effect on prices in the first five months of the year.

Nevertheless a tighter supply of new season lamb was supportive in delivering stronger producer prices throughout the summer months.

For the period May to the early September, new season lamb prices reached a record high of €5.14, equivalent to a 32c/kg above the equivalent period in 2016. Trade in live exports are expected to be back on 2016 levels where a total of 48,000 sheep were exported.

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For the year to date a total of 31,300 live sheep were exported, with France, Belgium and the Netherlands being the key destination markets.

Much of this trade was concentrated in the month of August where some 26,000 sheep exported ahead of the Muslim religious festival of Eid al-Adha.

UK Outlook

The UK sheep sector continues to reap benefits from the fall in Sterling particularly in relation to imports and exports.

In the January-June period UK sheep meat imports were back 18pc to 47,7000t carcase weight equivalent (cwe), this was due to the sharp downturn for New Zealand lamb supplies.

In addition exchange rate developments have pushed up New Zealand prices considerably whilst greater commitments of retailers to British lamb has also played an important role in reducing imports.

The weakening in Sterling has improved the competitiveness of UK sheep meat exports. In the period January to July exports reached 50,000t (cwe) up 15pc on the equivalent period in 2016.

UK lamb and mutton production in 2017 is expected to remain up on last year.

In the first six months of the year, production rose by 8pc due to a higher carry over of hoggets.

This year's lamb crop is now assumed to be slightly higher than last year given a small rise in the breeding flock last December and excellent spring with lambing rearing rates similar to or even slightly up on last year.


Chinese import demand was very firm at the beginning of 2017 with the Chinese New Year but since then imports have fallen back to normal levels based on data for Australian and New Zealand shipments to this market.

New Zealand shipments to China in January-June were up 4pc on a year earlier but this was entirely due to higher trade in January.

Australian shipments, which are lower than those for New Zealand, were up 9pc in January-June but this was only due to sharp year-on-year growth in January.

New Zealand

The seasonal pattern of marketings of lambs so far in the current season has been more normal after last year's drought.

However for the year October 2016 to September 2017 they are still expected to be down by 5pc, on 2016/17 with a slightly small fall in production, given higher carcase weights associated with better grazing.

According to Beef and Lamb New Zealand, the year to June 30, 2017 the breeding ewe flock decreased 1.9pc to 17.80m.

Despite the small decrease in the number of breeding ewes, the 2017/18 lamb crop is expected to be up 1.1pc, to 23.5 million, equivalent to an additional 300,000 head on last season.

This is the result of several factors, including continued improvements in productivity by farmers leading to better ewe lambing percentages, good feed supplies and a lift in the number of ewe hoggets mated.

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The lamb market in New Zealand has become much stronger in recent months and prices to producers are now up around 20pc on July last year.

With reports of excellent lambing conditionals, good survival rates and tightness in global supplies New Zealand lamb farmers are optimistic about 2016/2017 after two successive years of drought and challenging price returns.

Declan Fennell is Sheepmeat Sector Manager with Bord Bia

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