Retail Crumbs for Irish Food Producers
The latest Eurostat figures (2009) show that our consumers pay one of the highest price in the EU for food and many other goods. This is surprising as Ireland is a major food exporter and Irish farmers have suffered a very severe drop in incomes last year.

Our retail prices for meat are over 20% higher than the EU average while livestock producers receive over 10% below the EU average. (Ref Bord Bia). In Britain farmers receive better prices and consumers pay less …

It’s the same story for milk while CSO data shows that Irish farm gate milk prices fell by 50% consumers were paying much higher prices than the EU average for butter, cheese etc. In effect over recent years the multiples pocketed the drop in farm gate prices.

Unfortunately the food processing industry is in a weak negotiating position while Irish and EU politicians are reluctant to take on the powerful multiples who may retaliate by importing more “cheap” food.

Good Times Again for Milk Producers

Milk prices at farm gate are close to 30 cents per litre so after a long winter and a late spring the good summer weather and higher milk prices are a welcome boost for dairy farmers. This has boosted attendance at Agri events such as the IHFA open day.

Due to a combination of good grass growth and increased meal feeding milk supplies picked up dramatically during May and June. Prior to this supplies up to late April period were well down on the previous year. The number of replacement heifers retained has increased significantly so we can expect to see increased milk supplies when quotas are abolished.

However this will put pressure on processing capacity as most of our milk production is seasonal. Massive investment will be required to fund increased capacity so farmers may have to pay a levy on the extra milk produced. One way to minimise costs would be to financially encourage farmers to produce more milk earlier and later in the year.

Livestock Exports to Hit Meat Factories

Exports of calves and live cattle are at record levels this year –indeed last year exports were at their highest since the year 2000. This is not surprising as producers believe that they are not paid adequately for finished cattle. So we can expect to see more factories closing or reducing their work force as the impact of lower supplies takes its toll.

The fall out from the problematic new grading system has also damaged relations between farmers and factories. On a positive note lamb producers have had a good start to 2010 with prices up by 10%. This is partly due to the fact that sheep numbers have been falling for the last five successive years.

Improved Prospects for Grain & Forestry

Weather conditions this summer favour better crop growth so a good harvest can be expected. In addition due to adverse weather conditions elsewhere reduced yields are anticipated in Canada, Russia and the Ukraine. So allied to a weaker Euro, tighter world stocks Irish cereal growers can expect better prices this autumn.

Good prices for timber and the positive role of forestry in climate change mitigation have boosted farmer confidence. Forestry is now seen as a secure long term investment and only 10% of our land is planted compared with an EU average of 40%. Planting this year will be about 7,000 Ha based on estimates of an increase of 10-15 % on the previous year.

World Population is increasing-So is Food Production

Over the last 20 years the world population has increased by 31% to 6.8 Billion people. However food production has more or less kept pace with demand. This reflects great credit on farmers, improved genetics & new technology.

For example according to the data available in 1964 the world consumed over 500 million tonnes of corn, wheat & soya. Today it is estimated that production of these crops has increased to 1,681 million tonnes.

The experts reckon we need to increase world food supplies by another 50% over the next 30 years to cope with the ever increasing world population. EU economic growth is now determined by the demand from China & south east Asia

China Worlds Biggest Car Market

More cars are now sold in China than in the USA. China is now out of recession which is good news for Irish & EU exporters. As regards Agri prospects current stocks, crop yields, weather conditions, regional politics & the economy all interact so world markets can be volatile.

For Irish cereal growers who have had some difficult years a new hedging service through LFFE futures market will help minimise future trading risks. This valuable service will be provided by Delta Index an Irish firm.

Farmers Sign Up for Quality Assurance

Bord Bia has done well to get 30,000 farmers signed up for their beef Quality Assurance scheme. Apparently 50% of our beef is now sold on markets which require a quality assured product so this will make life easier for the meat industry & should help to improve farm incomes.

World beef prices are rising due to reduced production in Argentina & the USA allied to higher demand from Asia, Middle East & Russia. The EU beef deficit is predicted to increase to 405,000 tonnes this year which is welcome news for our beef producers who are unhappy with current prices.

Arthur Celebrates with Imported Malt!

Irish malting barley growers are not too happy with Diageo. If Guinness was happy to use Irish malt for 250 years why is it now necessary to import 5,000 tonnes of malt from England?  In addition we have Tesco importing milk from Arla -a Danish company to replace a Lactose free & other brands from Glanbia.

The new IFA President John Bryan cannot be expected to take this lying down so expect  fireworks this year between the IFA, Diageo, Tesco et al.

Fertiliser usage has fallen significantly over the last decade due to lower tillage acreage, improved use of slurry & less fertiliser on grassland. However part of the price paid has been less grass grown, less forage conserved, lower crop yields  and  a failure to fill our national milk quota over the last three years.

Milk supplies are well down this year (estimated at 10% or 340 Million litres below national quota for Republic of Ireland) so Irish dairy processors need to encourage farmers to invest in more feeding & fertilisers otherwise supplies will continue to be in arrears.

The reality is that milk producers need a period of sustainable prices to restore confidence. Dairy farmers must meet current costs and need to reduce increasing farm debts.

Grass availability (three weeks late) and quality has been badly affected by poor weather over recent months. Forage supplies are very low, however compound feed & cereal prices are very competitive.

Fonterra Internet Auction

The Fonterra Internet auction for March saw prices paid for whole milk powders increasing by 0.8%, month on month. This online auction is a key barometer for world prices.

The New Zealand dairy season is coming to an end, with production still down despite late season rainfall. Milk volumes have also fallen in Australia by 4%.

The weaker Euro has meant that EU milk production is more competitive on world markets. A substantial Algerian tender for three month’s supplies is also expected to increase demand.

EU commodity cheese prices have increased by 20% since last June and they remain at historically low levels. So it’s no surprise that milk prices in Ireland, North & South continue rising much to the relief of  dairy farmers.

China to Import Beef

Due to falling production China –the fourth biggest market in the world for beef is to become a net importer. These imports will come from Australia, New Zealand, South America & the USA thereby taking pressure off EU markets- good news for Irish cattle farmers.

It’s been a good Easter for lamb producers as prices in Ireland, Britain, Belgium & France were excellent due to tight supplies (down 14% in Republic of Ireland). We export two thirds of our lambs and the Muslim population is growing in the EU so future prospects are good.

Tillage Farmers Diversify
Due to poor cereal prices in recent years and no clear sign that prospects will improve there is increased interest in alternative crops such as oil seed rape. Glanbia, Liffey/Drummonds & Quinns are all offering attractive contracts & farmers are  interested.
Other crops being considered in some areas include beans & peas which are a useful source of protein and good break crops. Trade sources say spring barley sown may be down by as much as 30% this year due to grower concerns over poor harvest prospects.

However the cold weather has increased demand for feed & reduced stocks significantly. In addition poor weather conditions has also reduced plantings in important markets such as Germany, Russia, Spain, Ukraine so cereal prices may be better than expect next autumn.

There is good news “growing” in the Agri-food business & farming circles. Demand worldwide for dairy products has improved and so have milk prices much to the relief of a hard pressed industry.

Last year we exported 6,000 heifers to Britain, Russia & other markets. ICBF are predicting a serious shortage of replacement heifers over the next three years so this is good new for pedigree breeders.

There is also a strong demand in France from Muslim customers for Irish lamb so sheep farmers are doing much better. Incidentally Ireland is the fifth largest producer of lamb in the EU.

Due to poor weather conditions over recent months we will not fill our milk quota for the year ending in April so dairy farmers have no concerns about leasing costs or a super levy.

Compound feed prices are also quite low so farmers facing a fodder shortage can supplement their stock at a reasonable cost.Obviously silage & straw prices have increased  but this is good news for some farmers.

Due to the collapse of the construction sector farm labour is no longer a major issue and farmers can now get building work done quickly & at very competitive prices.

Another bonus for those wishing to get into farming or who wish to increase farm size is that the price of agricultural land has halved over the last year.

However the big problem for all producers & Agribusiness is the credit squeeze from the Banks and its impact on farmer’s ability to pay debts promptly and on trade credit.

Good news for 2010-the recruitment business in the Agri sector is improving. However clients are discerning so we recommend investing in  career advice, a professional cv and some interview training.

We filled positions of Agri Operations Manager for Glanbia Plc  (North Wexford, Wicklow and Kilkenny area) and Product Development Manager for Premier Molasses in Foynes prior to Christmas.

Currently we are recruiting  four Agri Sales Agents for  Cavan/Longford, Limerick, Louth/Meath and South East Cork areas for a large, well established Irish owned animal health group.

In addition a client in Munster needs a Farm Inputs Manager. Commercial/sales experience is essential as this is a long  established, successful and diversified agribusiness operation.

We also need a Senior Commercial  Manager for a  new Pig Feed Nutrition Business based in the South East. So if you know people with itchy feet and a good track record please let them know.

The RUAS Winter Fair on December 10   in the Kings Hall, Belfast was another great success for the RUAS (Royal Ulster Agricultural  Society). As usual the organisation was friendly & first class.

All exhibition space was sold out and there is a waiting list of exhibitors from Britain & Ireland looking for more space or new stands.

There were over  20 exhibitors from  the Republic at this event. Dairy farmers visited the show in large numbers and were in  a positive mood due to improving milk prices.

Mervyn Jones,  President Elect of the Irish Holstein Friesian Association (IHFA) scooped the top award in the livestock exhibition section with his cow CROAGH FRAN 26.

So a great day for Mervyn who is originally  from Redhills in Co.Cavan  and his son Philip. The Jones family  now farm near Gorey in Co.Wexford and the Hallow Holstein herd has won many awards at Irish shows.

Due to poor weather conditions this year and low milk prices on world markets production is well below target in both the Republic and Northern Ireland.

The quality of forage is also poor and supplies are limited so it is unlikely that we will exceed our national milk quota for the second consecutive year.

However milk prices are increasing steadily and the milk to feed price ratio is the best it has been for many years.

This means that milk producers can afford to feed extra concentrates, increase milk supplies and significantly improve farm incomes.

In addition many cows are now in poor body condition due to poor grazing conditions this year so extra feed is advisable.

This will also help fertility, improve the nutrition of  pregnant animals so more calves will be born alive and healthy.

The Irish Government is also bringing forward payment of REPS, Single Farm Payments  and grant schemes so farmers depressed by wet weather have more good news.