Farmers hope for a better year ahead

WICKLOW’S AIB agri-advisor Liam Phelan has shared some insight for the farming community into the months ahead, saying that while planning ahead in the sector is not an exact science, there are certain factors to be considered.

Mr Phelan, pictured below, said that 2019 will largely depend on prevailing weather conditions, global supplies and trade negotiations.

‘Dairy commodity prices, although weakened somewhat in recent months, should remain relatively stable in the short-term, helping limit any reduction in onfarm milk price currently received. The outlook for the beef sector will be impacted more than most by the trials and tribulations of the Brexit negotiations, while for cereals, sheep and pigs, their fate will largely depend on global supplies. Overall at this stage, 2019 looks set to be another mixed year for the sector,’ he says. With just a few weeks left in 2018, is is hoped that 2019 is a better year all round, a year, irrespective of farm system or location, which will be remembered for increased expense, stress and workload.

‘On dairy farms,’ he says, ‘ milk price has remained relatively strong and is likely to average around 35c/l (solids adjusted) this year compared to 37c/l in 2017. Output held up well, even during the drought affected summer months, and to the end of September milk intake by creameries was up by 1.2 per cent. However, the increased input expenditure as a consequence of the weather will put downward pressure on dairy farm incomes this year.’

Mr Phelan says that a more challenging marketplace in the cattle sector will impact incomes this year.

‘While factory prices were running ahead of last year for the first half of the year, this was followed by a price reduction in July and August and current prices are now on a par with 2017. Throughput is up by about 2 per cent to date this year – driven by a large increase in cow throughput, which is up 7 per cent. What is obvious in the sector this year is the price variation in marts between quality and plainer lots.’

He says that there’s a similar story in the sheep sector, where prices in the first half of the year were well above 2017 levels. However, prices declined significantly from the end of May onwards, and are now on a par with 2017 levels. It was a year of mixed fortunes too for the tillage sector, he says with was a big increase in output prices recorded – to over €200/t in the case of barley, up around €60/t on last year, driven by a reduction in global stock levels for a second consecutive year.

‘ This price increase, combined with increased straw prices were negated by a reduction in yields – particularly for spring crops. Margins in the sector are expected to be at similar levels to 2017 – but with significant variation depending on crop mix and location,’ he says. Coming off the back of the highest margin-over-feed levels in over 10 years, Mr Phelan says the pig sector endured a very difficult 2018, with current prices running 14c/kg below 2017 levels and feed prices on the rise, marginover-feed is at its lowest level in 30 years.

‘Overall the good weather during September and October has helped somewhat, keeping stock at grass; winter crops sown and established (it is estimated that the area under winter cereals is up almost 30,000 hectares on last year), and also providing the opportunity to conserve additional winter forage supplies, meaning winter fodder deficits have reduced somewhat on many farms. The latest Teagasc fodder census estimates suggest that, despite the favourable conditions, one in three farmers still have a fodder deficit (average -15 per cent). The advice to those in deficit is to put a plan in place and take action early. ‘Hoping’ for a late winter/early spring, in itself, isn’t the most convincing strategy to rely on,’ he says.