Challenging Year For Irish Farming Despite Fall in Production Costs

 Breaking News
  • 2 Sisters and Standards in Poultry Processing Report Published The Environment, Foods and Rural Affairs Committee in the UK has published its report into 2 Sisters Food Group and Standards in Poultry Processing. The Committee launched an inquiry into 2 Sisters and poultry standards following the undercover footage released by The Guardian and ITN. The evidence sessions looked at the issues raised at the 2 [...]...
  • ADM Wins ‘Most Innovative Food Ingredient’ at Gulfood Excellence Awards Archer Daniels Midland Company has been awarded ‘most innovative food ingredient’ for its natural sweetening solution, Fruit Up® Fiber, at this year’s Gulfood Manufacturing Industry Excellence Awards. The awards recognize best practices and innovation within the food manufacturing industry value chain. Entries were judged on the additional value the innovations brought to developers, as well as [...]...
  • Bayn Europe Enters China Sugar Reduction Market Bayn Europe has signed a strategic framework agreement with Kong Wua Group in China, outlining the establishment of a R&D center for sugar reduction and production of sugar replacer solutions. Through the agreement, Bayn and Kong Wua will bring sugar replacer solution to the market to help tackle the sugar over-consumption social problems. “It is important [...]...
  • It’s Time to End Food Waste – White Paper Among the most interesting topics in the publication ‘It’s time to end food waste’ is a closer look at the psychology of food waste by Nina Waldhauer at the University of Wageningen. Waldhauer explains how “(…) the food sector business can create opportunities for reducing consumer-related food waste. It can be done in ways that acknowledge consumer´s goal [...]...
  • Orkla Sells K-Salat to Stryhns Orkla Foods Danmark has agreed to sell its K-Salat business to Stryhns, which is part of the Norwegian Agra group. The purpose of the sale is to concentrate Orkla’s activities on fewer categories. K-Salat has a product portfolio of salad spreads, mayonnaise, remoulade, dressings and potato salads in Denmark. Under the agreement, Stryhns will take over [...]...

Challenging Year For Irish Farming Despite Fall in Production Costs

Challenging Year For Irish Farming Despite Fall in Production Costs
August 04
09:18 2016

Following a number of years in which average Irish farm incomes increased, falling commodity prices, the drop in the value of sterling and some unfavourable production conditions are likely to have an adverse impact on Irish farm incomes in 2016. This is according to Teagasc economists in their newly published mid-year economic assessment of farm income prospects for 2016.

The fall in oil prices over the last 18 months has now filtered through to many areas of the agricultural inputs market. However, farm output prices are also lower this year, so a fall in overall farm income is likely in spite of lower prices for fuel, fertilizer and feed.

Teagasc economist Dr Kevin Hanrahan says: “The Brexit related slide in sterling, has had an adverse impact on Irish commodity prices generally, but particularly in the beef sector, given the importance of the UK market in Irish beef exports.”  The depressed dairy market has led to increased cow culling across the EU and this has increased the supply of beef on the EU market this year. EU beef prices have been lower as a result.  Dr Hanrahan notes that: “Savings on the cost side in 2016 were unlikely to compensate for the fall in beef prices this year, and that this would mean a reduction in margins and a fall in Irish beef farm incomes compared to 2015.”

TeagascLogoThe supply of Irish sheep and lamb has increased in 2016. While production in the EU15 has been steady this year, there is likely to be a slower growth in sheep meat demand in the EU. The impact of Brexit is being felt on the lamb market via the drop in the value of sterling, which makes UK lamb more competitive, both on its home market and also when exported to France. Irish lamb exports are therefore at a price disadvantaged in Ireland’s two main lamb export markets.  In spite of lower production costs this year, margins on Irish sheep farms will be lower than in 2015 due to lower lamb prices.

The imbalance between supply and demand on global dairy markets has led to a collapse in dairy commodity prices over the last 18 months.

Teagasc economist Trevor Donnellan says: “The protracted duration of the current dairy commodity price slump means that this period of low milk prices has persisted considerably longer than in the crisis of 2009.  While global dairy commodity prices are now showing some signs of a recovery, it will be of little benefit to Irish milk prices in the current season. A sharp drop in Irish dairy farm incomes in 2016 is now inevitable from the near record levels of incomes in 2014 and 2015.”

Teagasc economist Dr Fiona Thorne comments: “Irish cereal yields for the 2014 and 2015 harvest season were well above average and this compensated to some degree for the low price levels in those years brought on by good international harvests and a build-up of grain stocks.”

However, weather conditions generally in Ireland for the 2016 cereal harvest have been much less favourable than in 2014 and 2015.  As a result it is likely that Irish cereal yields will be well down this year on the previous two years.  By contrast it looks like being another good year in terms of international cereal production, which will mean that international cereal prices are likely to fall this year compared to harvest 2015. Dr Thorne concludes that “with lower cereal yields and lower prices that there would be a considerable fall in tillage farm incomes in Ireland in 2016.”

About Author



Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • November 28, 2017Fi Europe
  • December 4, 2017Plastics and Paper in Contact with Foodstuffs 2017
  • January 8, 2018RAI Exhibition
  • January 16, 2018Sival Plant Production Trade Show
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here