‘43% of farmers plan to expand their farms over the next one to three years’
Some 43% of farmers plan to expand their farms over the next one to three years, a Bank of Ireland Agri Pulse survey has found.
A similar number, 44%, indicated that they would prefer the farm to remain the same size, while 13% intended to scale down.
The research was conducted for Bank of Ireland’s ‘Agri Pulse’, a new addition to the Bank of Ireland Economic Pulse series, which surveyed farmers on a range of topics.
Over the next 12 months, it found that 24% of farmers expect to increase investment on farm, with farmers surveyed citing building upgrades, new equipment and livestock purchases as the main investments.
The majority of farmers surveyed plan on spending up to €50,000 on investments.
Dr Loretta O’Sullivan, Group Chief Economist, Bank of Ireland said that the results of the survey show that a large number of farming businesses are on a growth track.
“While most of those planning on expanding over the next one to three years are likely to do so cautiously, the rest are set to actively pursue opportunities to grow.”
Younger farmers are more ambitious, with three in five (61%) of those aged under 50 planning to grow the business over the coming years.
The data also points to some pressures on the input cost front.
Excluding labour, but including inputs such as feed, fertiliser, fuel, veterinary and land rental, just under half (46%) reported that costs had risen over the past year.
The survey results show that the picture is more mixed when it comes to the prices farmers expect to receive on the market.
Half of farmers (51%) expect to see a drop in prices over the next year, with one in five (18%) expecting an increase.
Discussing the pricing data, John Fitzgerald, Head of Agriculture, Bank of Ireland Business Banking said that there is expected to be a spike in cattle supply towards the end of this year, which many fear will have a negative impact on prices.
“Recent developments in dairy markets point to an improved milk price in 2017, helped by a likely reduction in supply from the EU, New Zealand and Australia, as well as increased dairy consumption in China and oil producing regions such as the Middle East and North Africa.
“With milk prices on the increase, we expect to see more investment by the dairy sector fuelled by further post quota expansion from 2017.”
Meanwhile, one in four farmers (25%) expect to see an increase in output over the next 12 months, with 62% expecting no change.
One in three (31%) saw an increase in farm output over the past 12 months, with half (52%) seeing the same output.
Supplementing farm income
The Agri Pulse survey found that 36% of the main farmers within each household are involved in outside activities to supplement the family farm income, while two in three are aged 50 or over. Some 82% of farmers are sole traders, it found.
Fitzgerald said that the results show that there is still a high level of farmers who need a second wage to supplement their earnings.
“However, we need more focus on encouraging younger farmers to enter the profession and see it as a sustainable career,” he said.
Bank of Ireland released the results of the survey ahead of this year’s National Ploughing Championships and this year its stand is located beside the NPA marquee in the centre of the site – Block 2, Row 11, Stand 267.
Bank of Ireland has a number of themed information areas at its stand this year which feature topics such as Managing Market Volatility, Maximising Farm Labour Efficiency, Business Planning with Think Business as well as the findings from the recent Agri Pulse Survey.
In addition, one of the main features at the Bank of Ireland stand this year is a must see “virtual ploughing” experience on one of Ireland’s largest tillage farms.