The Irish hogget trade has had a difficult start to 2023, with deadweight prices trending well behind 2022 levels. The weaker trade should also be considered alongside continued high input costs.
Seamus McMenamin, Bord Bia’s sheepmeat and livestock manager, sets out the factors at play and provides an outlook for the sector.
Reduced demand and increased supply
In Ireland, we consume approximately 15% of the lamb we produce with the remaining exported, mostly to Europe. This dependency on exports leaves us more exposed to shifts in the global marketplace than some of our European competitors who are more focussed on their home markets.
Lamb is also a high-cost protein relative to beef, pork and chicken, and is therefore the most exposed to changes in consumer behaviour, both on the domestic market and in key export markets.
Bord Bia’s most recent Meat Shopper Insights data found that consideration for purchasing lamb is declining in our key export markets of Belgium, Germany, Sweden, France and Italy.
The high price point of lamb is a contributing factor to this trend. While consumers are continuing to buy meat in these markets, they are increasingly seeking lower cost options.
This reduced consumer demand for lamb on the European market coincided with increased availability of product, which has contributed to the downward pressure on the Irish deadweight trade in early 2023.
A downturn in demand for lamb imports in both the US and China in the second half of 2022 increased the availability of lamb available for trading on the global market. Increased volumes of frozen New Zealand sheepmeat were exported to the EU in the final months of 2022 as a result.
This increase coincided with a notable increase in the volume of UK product being shipped into EU markets with some reports indicating notable volumes of lamb being held in storage across the EU.
Global supply outlook
On a more positive note some recovery in import demand in China in recent weeks is once again redirecting Australian and New Zealand lamb away from the EU market, which should contribute to a reduction in sheepmeat availability in the region as 2023 progresses.
Production is also expected to reduce across key lamb producing regions in the EU during 2023 with contractions in ewe numbers, high production costs and lower carcase weights all expected to contribute to this trend.
Meanwhile, production in the UK is expected to hold steady in 2023 following an increase in the ewe flock in 2022.
The 2023 lamb crop in Ireland is expected to contract in 2023 with higher ewe cullings, reports of reduced concentrate feeding due to high costs and reports of a poorer scanning ratio on some farms. All of this is expected to contribute to a decline in overall output.
In the more immediate term local hogget thoughput is expected to hold fairly steady in the early months of 2023.
Analysis has indicated an additional 60,000-70,000 hoggets have been carried into 2023 for processing when compared to 2022 levels however with fairly strong throughput being reported in local plants during January 2023 a proportion of these have already passed through the system.
Increases in lamb demand on the domestic and key export markets is also expected in line with key religious festivals in 2023.
This year Ramadan falls on March 22, Easter Sunday on April 9, and Eid al-Adha on June 28. These festivals have become increasingly important dates in the sheep farming calendar and should help stimulate stronger demand for lamb from the marketplace.
Market access for Irish sheepmeat
Europe continues to be the main market outlet for Irish sheepmeat, however securing access to the widest range of potential markets continues to be a key priority for Bord Bia. It is continuing to engage closely with the Department of Agriculture Food and Marine (DAFM) and sheepmeat processors in developing market access.
There are significant opportunities for Irish lamb in the US and Chinese markets and achieving direct access to both markets remains a key focus of the sector in 2023.
Bord Bia lamb promotion
In 2023, Bord Bia will run two bursts of promotional activity to encourage Irish consumer to choose Bord Bia Quality Mark lamb. The campaigns will feature TV ads, social media posts and videos, and partnerships with social media influencers.
The Quality Mark lamb campaigns will run from June 5-25, and from September 18 to 8 October.
Bord Bia’s export market promotion is primarily focused on the priority European markets of France, Germany, Belgium, Italy, Switzerland and the Nordics, although there will also be engagement in other markets where the opportunity arises.
Activity includes partnerships with leading retailers to promote Irish lamb, special St. Patrick’s Day events, print and digital media campaigns targeting consumers, and engagement with buyers through trade fairs and market study visits to Ireland.
Outside of Ireland and Europe, Bord Bia continues to raise awareness of Ireland as a supplier of safe, high quality, sustainable lamb through our EU co-funded beef and lamb campaign. The €4.78 million campaign launched this year and is running in South Korea, Japan, China and the US.
For more information on the sheep trade, click here.
