Irish sheepmeat production in early 2024 is expected to be bolstered an extra 40,000 sheep carried forward from 2023 with production forecast to decline in the latter half of the year.

The prediction was delivered by Bord Bia livestock sector manager Seamus McMenamin at the organisation's meat market seminar held on Friday morning in Kildare.

The higher carryover prediction is based on lamb throughput falling by 75,000 head in 2023 with inclement weather, high input costs and later lambing blamed for the reduced sheep kill. Thankfully, Seamus predicts a more positive trading environment in early 2024 which should maintain a strong floor under the trade.

Lamb prices have started 2024 approximately 60c/kg to 70c/kg ahead of the corresponding period in 2023. Demand in key export markets is described as robust with domestic sales also recording a more positive tone.

Production across the EU fell by 2.3% in 2023 and is forecast to fall by 1.3% further in 2023.

Seamus McMenamin, at the Bord Bia Meat Marketing Conference. \ Claire Nash

Seamus outlined that high production costs and challenging weather witnessed farmers in key export moving to finish lambs younger and at lighter weights. This has had the result of reducing production potential and leaving supplies significantly tighter heading in to 2024.

Strong finish

The year 2023, in the main, was viewed as presenting a challenging trading environment for sheepmeat. Lamb prices in quarter 1 2023 (€6.25/kg) lagged behind 2022 levels by 60c/kg with prices in quarter 2 (€7.37/kg) running 18c/kg lower. The differential narrowed in quarter 3 (€6.39/kg) to 6c/kg while farmgate returns in quarter 4 averaging €6.37/kg were 4c/kg higher than the previous 12 months.

The high price point of sheepmeat and continued food inflation was highlighted as putting significant pressure on sales while access to cheaper imports also put pressure on the trade. This is demonstrated in the fact that Irish sheepmeat exports were steady in 2023 at 77,000t but value fell by 7% to €440m.

There was a strong finish to the year with lamb purchases increasing in quarter four of 2023 in key markets. Lamb occasion purchases increased by 14% in Belgium, 12% in Britain, 9% in Ireland, Sweden and Germany, and 8% in Netherlands and 7% in Italy. This has brought sales volumes back to 2021 levels with the exception of the UK (1% lower) and 2% to 5% higher in Germany, Ireland and Sweden.

2024 production

Production in early 2024 is also expected to be supported by key religious festivals of Easter and Ramadan. The one area of concern which could derail such market forecasts is competition from lower-priced sheepmeat imports from New Zealand and Australia and continued higher imports from the UK.

Sheepmeat imports from the UK increased by 12% in 2023 with the sector exporting higher volumes of high-value domestic produce and replacing this with lower priced imports. This is a continued worry for future years with UK trade deals allowing higher tariff-free imports.

Longer-term forecasts

Sheep production levels are expected to potentially decline in the second half of 2024 with Seamus outlining that continued contraction in the national ewe flock will reduce Ireland’s production potential. Additionally he said that scanning operators are reporting higher barren rates and a lower litter size, both of which will reduce the number of lambs on the ground.

Looking further afield recovery in the Chinese economy is viewed as having a major influence on global sheepmeat markets. China accounts for in excess of 40% of sheepmeat traded globally and is the destination for over 50% of New Zealand’s sheepmeat exports. Chinese sheepmeat import demand is expected to increase slightly with Gira markets specialist Rupert Claxton predicting Chinese sheepemat imports to grow from 448,000t in 2023 to 460,000t in 2024.