All of the North’s main livestock sectors are now back on – at least – an even keel, from a business performance perspective, according to Ulster Bank’s Head of Agriculture in Northern Ireland Cormac McKervey.
“It is the relative weakness of Sterling against the Euro that is driving this trend, for the most part.
“Since the Brexit referendum, we have seen a significant weakening of Sterling. This has helped boost food exports while making imports into the UK market more expensive,” he said.
As a consequence, pig farmers in Northern Ireland have returned to profit, lamb prices have strengthened significantly and farmgate beef returns have remained strong.
McKervey was speaking at a recent briefing for members of the Guild of Agricultural Journalists of Ireland, held in Belfast in the run-up to this year’s Balmoral Show.
He also confirmed the recent strengthening of milk prices.
“This is only partly due to the Euro factor. Developments in global dairy markets have also had a positive impact on the returns received by farmers for their milk.
“All of this is feeding into improved financial performance on farms.
“Where dairy is concerned, the vast majority of the 200 Ulster Bank clients who had reverted to interest-only loan repayments a year or so ago are now back meeting both their capital and interest commitments. So it’s very much business as usual.”
McKervey admitted that Brexit will pose a number of challenges for agriculture during the period ahead with two issues of key importance to farmers – trade and the future prospects for direct payments.
“The UK will remain the largest market for Northern Ireland’s produce.
And, potentially, this is a good news story, provided London does not make future international trade deals leading to the import of cheap food from around the world.
McKervey added that changes to the single payment support arrangements are coming down the track.
“We now know that the current measures will remain in place until 2020. There now seems some likelihood of a five-year transition period, which will allow the phasing in of new support measures.
“And I welcome the scope of the envisaged transition period. Farmers will need time to adapt their businesses to the changes that are coming.
“But the reality is that pig and dairy farmers could survive a cut in the direct payments they receive; beef and sheep producers might not!”