EUROPEAN sheep farmers have progressively abandoned the production of wool in favour of sheep meat production over the years, due to the low returns they receive for their wool and are now key players in the world sheep market.
Agro economist Anne Mottet from the Institute de l'Elevage said the 27 member-State European Union, with more than 100 million sheep, is one of the leaders in the sheep meat market and is ahead of New Zealand and Australia in terms of production.
In the EU sheep were historically reared for wool, milk and meat, but sheep producers have progressively abandoned the production of wool.
Ms Mottet said in the same time, the industrial revolution in Europe and the increase of meat consumption led farmers to develop the production of beef and sheep meat.
"In France, Ireland, the UK and the other Northern member states, farmers started crossing their local multi-purpose breeds with meat-orientated rams to maximise the return from the carcases," Ms Mottet said.
The EU was the first producer of dairy products from ewe milk with world-wide famous cheeses like the Greek Feta, the Italian Pecorino or the French Roquefort.
Ms Mottet said in Southern France, some sheep farmers specialised in dairy production, with specific breeds like Lacaune or Manech.
In other southern Europe member states, dairy production also remains of great importance, like in Greece or Italy, where a majority of ewes are milked.
Ms Mottet said despite all this production the EU is only self sufficient for 80 per cent of its sheep meat consumption and production seems to be deeply engaged in a decreasing trend.
In southern areas of the EU where most of sheep farming is dairy orientated, the flocks are small and sheep meat is only a by-product of the dairy production.
Ms Mottet said lambs from these milking ewes are slaughtered at very light carcase weights, generally less than 13kg.
In the northern EU, including the UK, Ireland, the Netherlands, sheep milk is mainly found in niche markets that have few links with tradition.
"Sheep farming here is exclusively for meat production and lambs are mostly slaughtered at more than 13kg carcase weight," Ms Mottet said.
In terms of France, Ms Mottet said a quarter of ewes are milked and three-quarters are meat-orientated.
In Greece, where 95pc of the ewes are milked, the average carcase weight is 9.5kg, compared to Belgium, where breeds like Texel average 19.5kg.
Ms Mottet said in terms of production the UK is the biggest sheep meat producer, producing 326,000 tonnes carcase weight equivalent and accounts for 34pc of the total EU production, despite Spain having the largest flock in the EU.
Spain is the second largest with 157,000 tonnes or 17pc of total, while France is the third biggest and accounts for 12pc.
Ms Mottet said since the early 1990s, production in the EU has been in decline.
"Over a period of 15 years, European production has decreased by 15pc and it was heavily affected by the UK's foot-and-mouth crisis in 2001 and never recovered from the resulting decline," Ms Mottet said.
"As a result, the EU shortfall is increasing every year and it reached 276,000t cwe in 2008, representing a self-sufficiency rate of just 77pc and this rate varies greatly from one member State to the next.
"Ireland is an exporting country and consumes only about 30pc of its production, while France, Germany and Italy depend on imports for more than 50pc of their needs."
The United Kingdom, the biggest European producer of sheep, imports more than 100,000t cwe every year, with about 75pc coming from New Zealand and 15pc from Australia.
Ms Mottet said these imports have been on the increase since the 2001 foot-and-mouth crisis in order to counterbalance not only the decline in UK production but also the growth in exports, mostly to France.
Ms Mottet said sheep meat is a sector in which quality schemes are particularly strong.
"For example, in France, 50pc of the ewes and 25pc of commercial farms participated in a quality scheme in 2008, with Label Rouge being the most famous of them.
"The consumption of lamb is tied less to market rates than to domestic availability," Ms Mottet said.
"The sector is very slow to recover from any fall in consumption and apart from the problem of availability, the consumption of lamb in Europe, particularly in northern Europe, is beset by a poor image and high prices.
"Sheep meat is perceived to be a traditional meat that is difficult to cook and has a taste that's not to everyone's liking.
"In addition, lamb is often one of the most expensive meats at the meat counter, both as a result of the high costs involved in the dressing of the carcase compared with other animal species and also of the low volumes processed, often preventing economies of scale in the sector."
According to Ms Mottet, European lamb faces fierce competition from products originating from countries such as New Zealand, whose prices are highly competitive, especially for fresh meat, competing directly with European meat.
"Depending on the country, price differences can vary from 50pc to 100pc compared with the price of local lamb," Ms Mottet said.
"In some member States, it is sometimes difficult to distinguish New Zealand lamb at first glance owing to the labelling occasionally being vague and distributors displaying a mix of products of different origin at the counter.
Like in Australia, the decline in sheep numbers in Europe is also having an effect on processors.
"Small and medium-sized structures have had to shut down," Ms Mottet said.
"In Scotland, 16pc of its abattoirs have closed since 2000, while in England, 20pc have closed.
"Although the whole carcases are the most marketed product, the quarters and ready-to cut portions such as boned cuts are growing in demand."