For the first time in more than 50 years Britain has become a net exporter of sheep meat.
Of all EU countries, only Ireland and Britain are seeing flock numbers expand.
Both countries are the only ones with a real grass based sheep sector.
The rapid rise in grain prices should act as another incentive to increase sheep output and increase grass utilisation in lamb production.
The variation among sheep farms in terms of profitability is huge.
In the Teagasc sheep programme profitability report, the top third of sheep producers had a gross margin of €749/HA, the bottom third a gross margin of €80, little more than 10% of the top segment.
The scope for improvement in profitability is clearly very significant.
Coupled with scope for improvement in on-farm profitability, Europe continues to be in significant deficit in lamb and sheep meat.
Its main traditional supplier countries New Zealand and Australia have seen catastrophic declines in their flock numbers. New Zealand has not even filled its hard fought-for quota to the EU since 2009.
While France is by far the main EU market, a range of other markets has opened up. The traditional lamb consuming nations of North Africa and the Middle East now have lots of oil money to help their consumers fulfil their dietary wishes.
As in the dairy, grain and beef sectors, there has been a convergence of prices. New Zealand farmers are now receiving very close to European prices but the wholesale conversion from sheep farms to dairying has blunted their capacity to grow sheep numbers again.
While market prospects for sheep are favourable, there are new factors at work. The first is the explosion in grain prices. This may not be a permanent feature of life but with oil prices continuing to strengthen, the value of ordina
ry EU feed wheat for ethanol production as a substitute for petrol is very real.
This alone will set a base under cereal prices. The inference for Irish sheep farmers is clear. Darren Carty, our sheep specialist reported major farmer interest in improving sheep performance at the recent National Sheep Day in Athenry.
With ICBF, through the Sheep Ireland programme, we are seeing major improvements in performance measurement and data collection.
Part of the reason for such variations in on-farm performance is the variability in ewe prolificacy - a highly heritable characteristic.
While lamb is seen as an expensive meat, an increase in pig and poultry prices is inevitable. This will partially narrow the gap but it will certainly not close it.
The Irish sheep sector should see a potential for greater profitability in increased returns from the market and greater productivity from the application of new measurement and data collection initiatives.
The future for a significant Irish grass-based enterprise has seldom looked brighter.
Farmers intending to produce early lamb with a large grain input should now look for some kind of price guarantee.
Source: Argentine Beef Packers S.A.
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