MORE OF the same – that seems the most likely outlook for the sheep industry in 2005, despite the reality of CAP reform and the loss of sheep annual premium.

While this summer did not bring the high prime sheep values of 2003, prices have loosely followed the same trend, reflecting a stable sheep sector.

Average abattoir values have ended the year at 250p/kg, about 4p down on December 2003. It seems likely that next year‘s trend will follow much the same pattern.

As far as domestic production is concerned, consensus in the industry suggests the national flock will undergo little change in 2005, perhaps shrinking marginally from 16.3m breeding ewes to 16.1m.

But another view is the suggestion that CAP reform could lead to a real decline in flock numbers, as producers will no longer keep unproductive sheep to fulfil quota requirements.

It is likely to be towards the end of the year before producers make these decisions, when they decide which ewes to put to the tup.

The loss of sheep annual premium could put pressure on producers‘ cash flows, making it harder to invest in new breeding replacements.

But more immediately, ewe productivity is expected to rise, given the better forage growth this season and availability of winter fodder.

Ewes were also in better condition as they went to the tup this autumn, having suffered no repeat of the long, hot summer of 2003.

Prime lamb slaughterings in 2004 reached 13m head, and are expected to grow by 1-2% next year.

Exports will remain crucial to the success of the sheep sector in 2005. Total shipments this year amounted to 78,000t, of which about 75% went to France.

Traders are confident of shipping a similar tonnage this year, despite lower consumer spending.

UK household purchases were up 3% on last year, and many are optimistic the renaissance of mutton as a gourmet’s choice will do much to firm depressed cull ewe values.

Currency values will also continue to influence the stability of the sheep sector. A strengthening of the pound could cause the euro to sink back towards 65p, its weakest point this year, which could restrict exports.

Overall, trading looks set to remain firm next year, with EU meat prices higher than a year ago.

UK deadweight lamb prices this year ranged from 310p in the spring to 237p in November, and the trade expects little change.