Mayo-based company Genfitt has launched its Knowledge Report 2020, which indicates that the majority of businesses feel optimistic about what lies ahead in 2021.
The annual report, which was first published in 2016, gives an indication of performance trends in the Irish agricultural sector.
The findings are based on interactions with the sector’s suppliers and decision makers. These include independent agri-merchants; co-operatives; machinery dealers and machinery manufacturers; as well as trade bodies and financial institutions including the Farm Tractor and Machinery Trade Association (FTMTA); Teagasc; and Bank of Ireland.
Despite major setbacks due to Covid-19 and an impending ‘no-deal’ Brexit, participants in the research are optimistic about the future of agriculture for 2021.
The majority of people surveyed feel moderately optimistic about the future.
Data source: Genfitt Knowledge Report 2020
The main impact on the agricultural sector this year was on practicalities such as logistics and ways of working.
In terms of business associated with the agriculture sector, the outlook is somewhat positive – rating it as ‘good’ or ‘excellent’.
Data source: Genfitt Knowledge Report 2020
Brexit uncertainty
The report indicates that “without question, the big unknown is Brexit”, adding that the “general expectation is that there will be no immediate step changes on January 1”.
“This will be more of a challenge to the UK government, which has legislated against any extension of the transition period. None of the scenarios are good for Ireland generally, or the agri sector specifically,” the report adds.
However, despite anticipating this negative impact, the sector is equally confident that it will adapt and respond to whatever challenge Brexit presents.
Managing director of Genfitt Ronan Egan told AgriLand that the company has made as many Brexit preparations as it can but some elements are beyond its control.
“We’d be relatively optimistic that business would continue and our sector is very resilient in that way. Animals have to be fed and grass has to be cut,” he said.
MD of Genfitt Ronan Egan
Egan said that some of the bigger companies connected to the agriculture sector which export to the UK, have been preparing somewhat for Brexit.
“Not a lot has changed, so if you were prepared a year ago, in as far as you could be, you’re probably as well prepared as you were this time last year,” he said.
“Certainly the bigger manufacturers who have any interaction with the UK seem relatively well prepared. For the smaller business with a domestic outlook, it’s not as relevant.”
Dairy future
Milk prices declined in late 2019 and 2020 which meant that confidence in Q1 (January to March 2020) was weaker than it might have been. However, the report states that the dairy sector is “efficient, high-quality and profitable”.
It adds: “Ireland has positioned itself as a premium producer, which protects the sector from short-term fluctuations. The sector also quickly adapts for new markets and products. The immediate outlook is favourable – even with the uncertainty of Brexit.”
Future for beef
The research shows that there is no immediate end in sight for the weak price of beef, but there is optimism for the future with another support scheme.
“It won’t be easy. Beef competes with other animal sources of protein such as mass-produced chicken; pork; fish and shellfish [farmed and free range]. Many of these are simply more competitive in price,” the report states.
Chairman of Genfitt Paul Duggan said: “Even in February, nobody could have forecast what was going to happen. The market has been complex, volatile and uncertain – and yet the farming sector and the companies which support it appear to be on course to have one of their better years.”
The company was established in 1973 in Kiltimagh, Co. Mayo, to supply spare parts and accessory products to re-sellers and retailers in the farming, engineering and hardware trades, employing over 50 people.