Interest rates hike poses potential headache for
approaching the point of full employment.
Against this backdrop, investors have moved to take advantage of further growth prospects by pouring money into European assets.
The result of this movement of capital into the Eurozone is a stronger euro.
Over the past year, the euro has risen sharply in value relative to the British pound and the US dollar.
The rise in the euro’s value throughout 2017 has been widely acknowledged as a significant headwind to the farming sector.
At the beginning of 2017, the rise in the euro’s value was largely due to external factors, mainly Brexit and political uncertainty in the US.
In the final months of 2017, the improving economic backdrop in Europe provided further impetus.
These are being watched intensely by those involved in the agri sector.
In tandem with the improving economic outlook and the stronger euro, Irish farming is undergoing a significant expansion and transition, especially in the dairy sector.
This is, of course, being driven by the removal of milk quotas as well as the increasing difficulty in generating sufficient income from both tillage and beef enterprises.
Dairy farming appears to offer a more viable and secure income but, for those in expansion mode and new entrants, there are significant costs before rewards can be reaped.
Global milk price volatility is also a key factor for the expanding dairy sector.
With that in mind, many co-ops now offer fixed milk price schemes whereby farmers can avail of a fixed price for a certain percentage of their milk output for a three to fiveyear period.
This aims to reduce the risk and volatility associated with milk prices throughout the year.
However, milk price volatility is not the only economic trend that can affect farm incomes.
With significant