A contraction in supplies will be the key factor in determining international sheep market trends over the coming months.
Lamb output in both the northern and southern hemispheres is set to decline over the coming months.
This was the focal point of the presentation made by Livestock and Meat Commission (LMC) chief executive, Colin Smith, to the recent EasyCare open evening hosted by Co. Antrim breeder, Campbell Tweed.
The last 12 months have seen a significant reduction in ewe numbers on the island of Ireland, Great Britain, Europe, Australia and New Zealand.
This has resulted in a proportionate decline in lamb supplies, a key driver for the record sheep meat prices recorded in Northern Ireland during the early months of 2024.
“During the last calendar year, 823,000 lambs were slaughtered in Northern Ireland. Of these, 57% were processed locally – the remainder were exported live to the Republic of Ireland,” Smith said.
“But, ultimately, 75% of lambs produced in Northern Ireland are destined for the EU market, directly or indirectly.
“However, throughput is declining. To date in 2024, lamb numbers coming through in Northern Ireland have declined by 14.5%.
“It’s this tight supply situation that is driving prices at the present time,” he added.
According to the LMC representative, sheep farmers in Northern Ireland are doing a good job in meeting market specifications with their finished lambs.
Currently, 90% of carcases are meeting this requirement. Where carcass weights are concerned, the number of lambs deemed to be overweight has dropped very significantly.
“Prior to Covid-19, the numbers exceeded 50%. By 2023, the figure had fallen to 25%. The average 2024 carcase weight figure is 21.74kg,” he continued.
“Ewe numbers in Northern Ireland are down 2% in 2023. The total sheep population of Northern Ireland is around two million head. This declined by 3% in 2023.
“These trends have been similarly reflected in all of the world’s main sheep producing regions. The UK sheep breeding flock was at its lowest recorded level last December, going back to 1996,” the chief executive said.
“A number of factors have been identified as drivers for this down-sizing of the sheep sector in many countries.
“These include the aging profile of farmers, access to land, access to labour, the cost of labour, policy changes driving land use, a real push towards environmental policy and environmental policies more generally,” he continued.
The commission’s chief executive specifically highlighted the focus placed on Lough Neagh by Stormont agriculture minister Andrew Muir.
He also referenced the impact of disease at lambing time across the water and the continuing pressure on input costs.
International sheep market trends
Europe recorded a 3.3% decline in sheep meat consumption levels during 2023, with a further 3.5% decrease for this year.
Smith outlined: “The Agricultural and Horticultural Development Board is noting the drop-off in lamb output.
“Consumers are also reacting to the higher prices for sheep meat. Lamb is one of the most expensive proteins.
“But there are market opportunities around religious and cultural events. Muslims now make up 6% of the UK’s total population.
“However, they account for 20% of total sheep meat consumption. The latest figures confirm that demand for sheep meat in Europe is now consistently rising during the first quarter of the calendar year.
“This reflects the impact of religious festivals and is a consistent metric that points to green shoots of recovery within specific aspects of the sheep meat market.”
Meanwhile, sheep meat imports into the EU market increased by 2.2%, New Zealand being a big player in this regard.
“Both Australia and New Zealand have a significant impact on the UK and EU markets, which are also supplied by sheep meat produced in Northern Ireland,” Smith continued.
“China takes a significant proportion of the lamb produced by New Zealand and Australia. So what happens in China impacts on global prices around lamb.
“We are seeing a very slow recovery in consumer confidence in that country, post-Covid. In addition, property prices in China are currently struggling.
“Consumer confidence there remains weak and this has a knock on effect across the economy of the country as a whole,” Smith explained.
The LMC chief explained that as a result, there is current disparity between the record prices for lamb in the northern hemisphere over recent months and those available to New Zealand and Australia.
“China remains New Zealand’s key market for lamb. But diversification into other markets, particularly Europe, remains an option in response to challenging prices.”
He added that “even in New Zealand, we are seeing the first signs of sheep meat production levels starting to plateau”.
Turning to Australia, the LMC representative highlighted that the country’s growing impact on global lamb markets with exports continuing to grow.
“We have seen record lamb slaughtering in that country. This has added to the quantities of Australian lamb available for export.
“But profitability for Australian sheep farmers remains a challenge, and this may result in a contraction of ewe numbers during the period ahead,” he said.
Smith added that the “tightening in lamb supplies across Europe has to be seen as a positive for the sheep sector in Northern Ireland”.
“Hopefully, this will continue to be the case. However, there is a need to keep a very close eye on lamb export levels from both New Zealand and Australia to the UK and Europe.
“If these figures increase significantly, the end result will be pressure on prices paid for lambs here in Northern Ireland.”
