33% of farmers plan to increase on-farm investment over the next year

One in three farmers are planning to increase investments on their farms over the next 12 months, according to recent research carried out by Bank of Ireland.

Agri Pulse is part of the Bank of Ireland Economic Pulse series and it indicates positive sentiments despite fears over Brexit.

The research surveyed farmers on a range of topics including: farm output; input costs; market prices; investment plans; and business ambitions.

It also revealed that 40% of Irish farmers expect output to increase over the next 12 months. Meanwhile, two thirds of farmers think that Brexit will have a negative impact on their business in the coming year.

The research also showed that just over half of those surveyed (55%) have ambitions to expand over the medium term.

Commenting on the results of the research, Group Chief Economist with Bank of Ireland Dr. Loretta O’Sullivan said: “While Brexit is a cloud on the horizon, improving farm profitability has helped brighten the mood.

39% indicated that the financial position of their farm is better now than a year ago, which is up from 24% in the April survey and 11% since last August.

“The results also point to some easing in input cost pressures and a better outlook for market prices, which bodes well for further improvements in profitability.

“Still, one in three farmers are involved in outside activities to supplement the family farm income.”

With regards to production, factors which were found to have an impact included: land shortages; cash flow; and price volatility. These were common to most sectors, while labour shortages appear to be an issue for dairy and sheep farmers in particular, according to the research.

Key concerns

Pricing and uncertainty are key concerns when it comes to Brexit, O’Sullivan explained. The renewed weakness of the pound over the summer and the lack of progress in the latest round of withdrawal negotiations will do little to alleviate these concerns, she added.

Although Brexit is clearly a headwind, it is encouraging to see that half of farmers are looking to expand their business in the next one-to-three years.

“Farming remains important for rural communities and local economies throughout the country. Agri Pulse provides an insight into what is happening in the sector, the issues and the trends,” O’Sullivan concluded.

A total of 250 farmers from across the spectrum were interviewed as part of the research.