Sageadvicefor farmerstotake actionin2019
THE AIB Agri Advisor for Louth Patrick Butterly has been looking back on the past 12 months in agriculture and encouraging farmers to take action now for the months ahead.
With only a few weeks of this year remaining, farmers will be looking to 2019 in hope and anticipation that it bears no resemblance to 2018 – a year, irrespective of farm system or location, which will be remembered for increased expense, stress and workload.
On dairy farms, 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%. However, the increased input expenditure because of the weather will put downward pressure on dairy farm incomes this year.
In the cattle sector, increased costs, reduced thrive and a more challenging marketplace will certainly 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% to date this year – driven by a large increase in cow throughput, which is up 7%. What is obvious in the sector this year is the price variation in marts between quality and plainer lots. Quality, well fleshed animals and forward stores continue to sell well, but plainer lots are finding it more difficult to find a home.
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. While throughput is up almost 3% on last year, (mainly driven by an increased throughput of ewes and rams) the throughput of lambs coming to market was later than previous years.
It was a year of mixed fortunes too for the tillage sector.
There was a big increase in output prices – to over €200/t in the case of barley, up around €60/t on last year. This price increase was 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.
Finally, coming off the back of the highest margin-over-feed levels in over 10 years, the pig sector endured a very difficult 2018, with current prices running 14c/kg below 2017 levels and feed prices on the rise, margin-over-feed is at its lowest level in 30 years.
All in all, reduced output prices, yields, and increased input expenditure have eroded margins and are creating cashflow pressure on some farms.
If you are experiencing or anticipate cash flow pressure, Patrick encourages you to quantify your requirements for the months ahead and to engage early with your bank.