The effect of the fodder crisis on Irish farming is estimated to be in the region of €500m.
This is according to Thia Hennessy, principal research officer at the Rural Economy Research Centre who was speaking at today’s Teagasc Future Weather, Future Farming conference.
“Fodder crisis is not a new phenomenon,” Dr Hennessy noted. “We don’t have to look back to far. In 1998 and 1999 there was also a bad fodder crisis.”
The Teagasc economics team arrived at the €500m total by examining the effects of the fodder crisis on a number of key areas including input volumes, input prices, output volumes and output price.
“Some of the impact of the losses during the crisis were offset by strong output prices especially for dairy in 2013,” she explained.
According to Dr Hennessy: “For farmers one third of the total direct costs of production are from concentrate feed costs and only about three per cent is purchased fodder.”
She continued: “In a typical year, which the last two weren’t, a one per cent increase in concentrate expenditure would reduce dairy farm income by 0.5 per cent and reduce cattle farm income by only 0.2 per cent. However, in 2012 and 2013 the volume of concentrate feeds used on the average dairy farm increased by 28 per cent per cow and nearly 40 per cent per livestock unit.
She explained that farmers were using more feed, but the most significant impact was the price of the feed.
“The price of concentrate feed increased very significantly in the 2012-2013 period. Expenditure on concentrate feed was up 50 on dairy and 70 percent on cattle. The total cost of increased concentrate use was €319m for the sector,” she noted.
The costs of fodder was also analysed. “The purchase of fodder increased by 35 per cent on dairy and 45 per cent on beef farms in 2011-2012. It cost approximately €21m in that year. In 2013 there are no firm figures yet. But from a farm survey carried out on farmer’s, Teagasc found that one-in-three farmers said they had a deficit of fodder. The cost farmers put on it was €50m.
Interestingly she said: “A quarter of farmers who said they bought fodder said it came from abroad.”
On the output side Dr Hennessy and the Teagasc economics team noted: “Milk production was down three and four per cent in 2012 that equates to a total loss of €47m.”
“Early slaughtering due to lack of feed was a definite feature on the beef side. This impacted on weights and quality on beef farms.” However she said: “this hard to capture in terms of its economic value loss.”
“What is known is the impact on livestock deaths. With 23,000 additional deaths equating to a €17m loss.”
In terms of on-farm productivity impacts from the fodder crisis, Dr Hennessy said: “There are also long-term productivity consequences such as soil damage, fertility of livestock.”
Also of interest was the regional impact of the crisis. She observed that the south, south west and the Midlands were more adversely affected in 2011-2012. “Is this because of the weather or the types of production? There were certainly more extreme changes in weather in some regions. Such as more rainfall in the south and south east,” she cited.
However she also cited that: “Farmers that are more intensively stocked and may use lower concentrate feed and rely on grass could be less affected. The more efficient farms relying on grass were more adversely affected by the poor weather.”