Pricing grid puts sheep farming on a knife-edge

There is no-one making a fortune out of sheep farming. Quite the opposite, in fact. While the dairy and tillage farmers enjoy a boom period and beef producers are seeing relatively strong prices, sheep farmers are still waiting for the golden era on prices.

Hundreds of sheep farmers leave the industry each year. Low income, coupled with high labour requirements, are always cited as the principal reasons for exiting. Many flock owners are working hard simply to lose money at the end of the year. When the sums are done, both the farm management surveys and Teagasc profit monitors show top farmers making modest net profits of €30 to €40/ewe. At the other end of the income scale, sheep farmers are losing money by keeping sheep and are wasting their REPS cash, single farm payment, and disadvantaged area payment just for the sake of keeping the grass down.

Head of sheep research in Teagasc, Seamus Harahan, had some shocking statistics at last week's sheep conference. In 1988/1989, sheep farmers were making a gross margin of €51/ewe, yet in 2005/2006 they made just €45/ewe.

The fact is: sheep numbers are falling across the world. The Irish ewe flock is expected to decline by 11pc between 2006 and 2016. The supply/demand balance is on a knife edge, and a world shortage could cause a price rise spike in the near future. But the big issue for sheep farmers now is the new price grading grid. Many are only looking for an excuse to get out of the industry and believe this new grid will be the final straw.