According to Teagasc’s Annual Review and Outlook 2019 report for the sheep sector, the outlook for 2019 is more positive compared 2018.

The gross margin earned by mid-season lowland lamb producers in 2019 is forecast to be €764/ha. This is a 10% increase compared to the estimated 2018 figure of €693/ha.
Teagasc says that this increase in gross margin can be attributed to the relatively stable outlook for lamb prices in 2019 combined with the expected decrease in the cost of production.

In addition, 2019 margins earned on the average mid-season lowland enterprises will continue to be boosted by the receipt of the coupled Sheep Welfare Scheme payment.

Total overhead costs for the average mid-season lamb enterprise are forecast to increase by less than 1% in 2019. As a result of the forecasted large reductions in input volumes in 2019, total costs of production are expected to be 6% lower in 2019 than in 2018.

While the costs of key inputs for sheep production is predicted by Teagasc to increase in 2019, a reduction in the volume of inputs used will likely lead to a reduction in the cost of production.

Compared to cattle less capital is required per ha for stocking and there is a much quicker return on investment. Sheep can also graze relatively wet & hilly land safely and without damaging the soil structure.

The total number of sheep in the Republic as of June 2018 was 5,105,500 and there are around 36,000 farmers with sheep. Average flock size is around 110 ewes. Donegal is the county with the most sheep (495,163) followed by Galway with 434,693, Mayo at 423,593 and Kerry with 321,372.

Ireland is the fourth largest sheep meat exporter in the world, and the second largest in Europe, exporting over 62,000 tonnes of sheep meat in 2017 totalling €311 million, up from €277 million in 2016. Exports to France and the United Kingdom both recorded increases during 2017 in the region of 7%, accounting for over half of total Sheep meat exports.

Market diversification however is evident with increased growth now being seen in the Canadian, Danish and Swedish markets.

The Department of Agriculture is hoping that significant progress can be made on access to China for Irish sheep meat during 2019, after a meeting with Chinese officials last November.

Senior Officials from the Department of Agriculture, Food and the Marine, have had productive technical meetings with counterparts in Beijing, in relation to meat market access to this huge market and other topics of mutual interest.

Prospects after Brexit are also excellent as we will not be competing in the French market with British lamb. Close to 90 percent of UK lamb exports are shipped to EU markets. France alone took over 50 percent of British exports in 2016.

To put the EU lamb market in context The UK is the largest producer and the largest exporter of sheep meat in the EU. In 2016 the UK accounted for 40% of EU28 sheep meat production. In that year Ireland accounted for 8% of EU28 production and France accounted for 12%. France is of course a huge market for lamb which is of course very popular with the growing Muslin population in the EU.

So machinery dealers can expect to sell more equipment over the coming years as the average flock size increases and farmers invest in more technology from drones to quad bikes , better fencing/penning/gates, slatted sheds, computerised flock handling facilities etc.