Sheep market after Poland’s EU accession

Abstract

The sheep population in Poland has been decreasing for more than twenty years. Only the intensity of the process changes. Initially, after Poland’s EU accession, this intensity was significantly weakened but now it once again starts to gain in force. Sheep farming development depends, inter alia, on the procurement price for live sheep. Due to the sheep export, which predominates production, these prices are not dependent on the demand and supply on the domestic market. The level of these prices is determined by several factors such as the exchange rate of PLN against euro, as well as the prices of sheep and lambs in the European Union. Strengthening PLN deteriorates the profitability of Polish export of sheep and sheep prices drop. In a reverse situation, i.e. when PLN weakens, the profitability of export increases and, in turn, the procurement prices of live sheep grow as well. Subsidies for farmers depend on the exchange rate of PLN against euro too. However, the influence of the subsidies is limited and it can be efficient in a specific market situation.