Sheep farming in 2022
Like suckler-beef and dairy farmers, Teagasc predicts that sheep farmers’ income will fall in 2022.
It believes that the outlook for Irish and EU lamb prices for 2022 is “less positive” than in 2021.
Its recent Teagasc Outlook 2022 Economic Prospects for Agriculture report states that export opportunities for Irish sheepmeat will support Irish prices in 2022.
Global sheep meat prices are forecast to remain high but down on 2021’s “record price” levels.
Following the UK’s exit from the Single Market, UK exports to the EU have fallen, authors added.
Feed and fertiliser: Sheep farming in 2022
It expects sheep feed expenditure to increase next year, with concentrate prices forecast to rise by 6%. It anticipates that feed use will “remain stable”.
Fertiliser prices are forecast to “increase substantially” relative to 2021.
“With a forecast decline of 20% in fertiliser usage, pasture and forage costs are still expected to increase by 70% in 2022.”
With much higher costs of production in 2022 and a “less positive” lamb price outlook, it expects gross margins for mid-season lowland lamb enterprises in 2022 to fall by about 15%.
It added that the Sheep Welfare Scheme in 2022 will continue to support margins from mid-season lowland lamb production.
In 2022, the average gross margin per hectare Irish mid-season lowland lamb enterprises earn is forecast to decline to €634/hectare.
In summary, Teagasc stated that output values and input expenditure will be up on 2021 levels, while incomes will fall.
Sheep farming in Ireland in 2021
Along with the above outlook for 2022, the report also reviews how prices faired out for sheep farmers this year.
Firstly, EU sheepmeat exports from January to September 2021 are down on the same period last year. For the year as a whole, EU exports are expected to decline 12% on last year’s level.
This follows from a 4% increase in exports in 2020 and an almost 10% rise in EU exports in 2019.
The report pointed to European lamb prices, which are “much higher” than last year.
Report authors said that prices for heavy lamb are up on average 22% in the year to the beginning of November 2021.
“It is expected that the average lamb price in Ireland for 2021 for the year as a whole will be much higher than in 2020. The year-o- year price change is estimated at 30%.”
Teagasc estimates that total direct costs of production for Irish mid-season lowland lamb enterprises increased by just over 20% this year.
Also, it estimates that overhead production costs are up by 6%.
“Gross margins per hectare for Irish mid-season lowland lamb producers are estimated to have increased in 2021 by over 26%, owing to much higher marketed output values in 2021,” the report states.
It acknowledged that receipt of Sheep Welfare Scheme direct payments boosted 2021 margins.
In the absence of the coupled payment from the Sheep Welfare Scheme, 2021 margins rose by 19% relative to 2020.
It estimates the average gross margin on mid-season lowland enterprises to be €748 per hectare this year.
