Prospects for Sheep Farming

Presentation by

IFA National Sheep ChairmanJames Murphy

Lismullin Farming Conference

Monday January 30th 2012

IntroductionIntroduction• Thank John Byrne and Lismullin for

opportunity.

• Background. Ewe numbers down from 4.8m to 2.2m in 20 years.

• Decline has stalled. Positive signs of regrowth.

• Renewed confidence at farm level.

• Driven by viable/profitable lamb prices

• Impact of downturn was severe– Exports fell, lost market share, young people– Sheep farming became unfashionable

2011 Sheep Numbers Stabilise

Million head

6.4

5.1

3.5%

Irish Sheep SectorIrish Sheep Sector

• 30,000 sheep farmers

• 2.2m export slaughterings

• 49,000t sheepmeat – 75% exported

• Output value €245m

• Economic, social and environmental contribution

• 9 major processing plants

Growth PotentialGrowth Potential• Higher lamb prices – increase profitability at farm

level• Provided prices are maintained – farmers will

respond and grow numbers• Potential to grow ewe numbers to 3m and lamb

output to 3.5m• Positive market opportunities - EU production

falling – only 70% self sufficient• EU imports down (New Zealand) and exports up• Increase production to 71,000t, valued at €360m –

45% growth to 2020.

Food Harvest 2020 PlanFood Harvest 2020 Plan

• Food Harvest 2020 targeting 20% growth

• If prices maintained – growth could be 3m ewes – 3.5m lambs – 45%

• Sector has put together its own FH2020 Implementation Committee

• IFA, MII (Meat Processors), Bord Bia, Teagasc, Sheep Ireland, DAFM

• Determined to drive sheep sector. Plan and targets.

ProfitabilityProfitability

Gross Margin per Hectare 2010

€/ha

Dairying 1,600 – 2,000

Grain 600 – 800

Sheep 400 – 500 (Top ¼ €1,000)

Beef 200 - 300

Target €1,000/ha gross margin

Sheep Agenda - PolicySheep Agenda - Policy

• WTO – Protection against import tariff cuts – no increase in TRQs

• EU – CAP 2013 – protection of Single Farm Payment – option of coupled payment for sheep

• National – maintenance of Sheep Grassland Payment – Disadvantaged Area Payments – AEOS/REPS3 – Commonage Framework plans/hill areas

Research and AdvisoryResearch and Advisory

• Strong research and advisory programme from Teagasc

• New research farm Athenry - €1,000 GM/ha

• Need new head of sheep advisory – 4 regional specialists and B and T advisors

• Blueprint for profit at farm level

• Increase output, technical efficiency and profitability at farm level

• More Better farms

QualityQuality

• Focus on quality, quality assurance and lamb presentation

• Retail and consumer demand for quality and quality assurance

• 8,000 in QA scheme

• Early season and late season lamb

Processing and MarketingProcessing and Marketing• Processors/Bord Bia/Teagasc• Increased processing and packaging innovation• Value added and convenience• Identify market opportunities for increased

output• Consumption challenge• Increased national and EU promotional budget• International market access• Story of lamb – environmental attributes

Other Sheep Agenda ItemsOther Sheep Agenda Items

• Tagging and EID – minimalistic approach

• Sheep Breeding Programme

• Structural Investment – TAMs

• Retail Regulation

Summary IFA Work Agenda Summary IFA Work Agenda – Major sheep agenda issues

– Food Harvest 2020 – 45% growth

– Maintenance of strong viable prices

– €1,000 GM target

– Strong national, EU and WTO policy

– Strong Government support

– Research and Advisory Programme

– Quality focus - consumption

– Processing and marketing innovation

– Sheep breeding programme

– Tagging and EID

– Structural investment - TAMs

SummarySummary

• Sheep sector has turned the corner

• Strong lamb prices – profit at farm level - strong growth

• Sector has major growth potential

• Stakeholders must drive the growth

• Implementation Group and Plan – Determined to succeed