Danske Bank’s head of agri-business, Rodney Brown, is confirming that most of Northern Ireland’s farming sectors are performing well at the present time.
In addition, the excellent weather conditions are helping to extend the 2021 grazing season in a meaningful way.
As a consequence, dairy and beef producers are benefitting from a combination of cheaper feed costs and the prospect of a shorter winter in their respective farming sectors.
Farming sectors – dairy
According to the Danske Bank representative, milk prices have continued to rise. Demand is good and processers seem to be in a position to offer these prices.
Browne added: “But in terms of overall financial performance we have definitely seen costs rise. This leaves people in a net position which would not be that much different from this time last year.
“Turnovers have certainly increased. But costs have started to spiral out of control. Feed prices have increased by £10 to £15/t over the past number of months. But we are now seeing that anything coming onto the farm is costing more.
“Machinery prices have soared and steel prices have risen around the world. Looking back on the out-workings of the last Tier 2 grant application, which was processed back in May, we have seen a lot of the kit that was ordered not being delivered on time,” he told Agriland.
Farming sectors – beef
Where beef is concerned, Browne immediately reflected on the significant uplift in prices that have been a feature of the market for the past number of months.
“Some farmers might say that it’s only now that they are starting to receive a fair price for their finished cattle,” he commented.
“Beef is hitting on £4/kg at the moment. There’s certainly demand in the market, whether that’s coming as a direct result of the [Northern Ireland] protocol, I don’t know. But there is certainly a demand for red meat out there at the moment.”
But, as was also pointed out, beef is not a circular economy.
“There are not that many farmers out there, who take animals from birth through to finishing,” Browne explained.
“We are now seeing very strong prices paid for live cattle in the marts. This confidence is based on the assumption that markets will remain buoyant. But there is no guarantee that this will happen.
“And, again, increasing feed costs are eating into the margins that finishers might hope to make this winter,” he added.
Pigs and Poultry
It’s a similar story, where pigs and poultry are concerned.
“Both sectors are doing well at the present time,” Browne confirmed.
But as he also pointed out, it’s not all good news; all of Northern Ireland’s meat sectors are now reporting delays in getting animals through their systems.
Specifically, where pigs are concerned, shortages of labour are starting to create delays when it comes to pigs being brought through to markets.
Brown explained: “Whereas up to now, farmers might have been able to get two loads of pigs away per week, this number might well have been reduced back to loads.
“At a very fundamental level, this is having a very negative impact on farm cash flows.
“But there are also associated welfare problems building up on farms. This is purely down to the fact that pig numbers are now backing up on farms in a very significant manner.
“Pig returns will always be volatile. We saw a bit of a drop in pig prices at the beginning of this week. But, on the whole, the pig industry is faring well and our pig producers continue to do an excellent job,” he continued.
The Danske Bank representative believes that Northern Ireland’s cereal sector can look forward to a bright future.
Browne continued: “This year has seen local growers securing excellent yields of both grain and straw with prices for both on the rise.
“Anything that can be done to reduce our reliance on imported cereals and protein crops has to be welcomed.
“DAERA [Department of Agriculture, Environment and Rural Affairs] has pushed forward with a two-year pilot programme aimed at encouraging the production of protein crops here in Northern Ireland.
“Importing cereals has an immediate cost implication. But it is a practice that also adds to the carbon footprint of our farming sectors,” Browne concluded.