1. Prospects for Sheep Farming Presentation by IFA National Sheep Chairman James Murphy Lismullin Farming Conference Monday January 30 th 2012

2. Introduction 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

3. 2011 Sheep Numbers Stabilise Million head 6.4 5.1 3.5 %

4. Irish 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

5. Growth 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.

6. Food 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.

7. Profitability Gross Margin per Hectare 2010 €/ha Dairying1,600 – 2,000 Grain600 – 800 Sheep400 – 500 (Top ¼ €1,000) Beef200 - 300 Target €1,000/ha gross margin

8. Sheep 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

9. Research 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

10. Quality 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

11. Processing 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

12. Other Sheep Agenda Items Tagging and EID – minimalistic approach Sheep Breeding Programme Structural Investment – TAMs Retail Regulation

13. 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

14. Summary 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