A whole-of-industry approach is required to deal with escalating input costs, according to the chair of the Irish Farmers’ Association’s (IFA’s) farm business committee.
Rose Mary McDonagh is calling on all stakeholders to play their part in ensuring that farmers aren’t the ones left carrying all the risk and full cost of these “phenomenal prices”.
She was speaking at a recent IFA ‘Feed/Fertiliser’ webinar, attended by 300 farmers and industry stakeholders, the IFA said.
The webinar sought to identify if there will be any turn in fortunes to increasing feed/fertiliser prices and what can be done in the short-term to farmers through the coming months.
‘Input suppliers need to quickly pass any reductions back to farmers and banks must be flexible and take an understanding approach,” the farm business chair said.
“The EU Commission needs to remove anti-dumping duties and the government has to be proactive with innovative support packages and quickly introduce the food regulator to give farmers a fair share,” she added.
She encouraged farmers to be proactive, to engage early with their agricultural adviser and financial providers, and to put a plan in place for the months ahead.
“It’s not only the added amount of money that’s important. It’s the change in the working capital cycle that needs to be planned for to avoid potential cashflow problems down the road,” she said.
Input costs – erosion to margins
While global markets suggest relatively strong output prices for milk, beef, sheep and tillage again this year, all sectors will be hit with significant increases in input expenditure that will erode 2022 margins and need to be planned for,” the IFA said.
The pig and poultry sectors are already heavily impacted by the input price rises and returning historic low margins.
Managing director with Grassland Agro, Liam Woulfe said they would certainly be learning from past difficult experiences of 2008/2009 and that it could be well into Q2 before there is any likely shift in prices.
StoneX risk consultant, Rory Deverell, suggested that we are in a perfect storm at the minute but that the necessary instruments are there to prevent this type of market imbalance, shock and risk for farmers in the future.
“We can hedge natural gas, we can hedge fertiliser, and we can hedge grain, so it’s certainly something to consider down the line,” he said.
Teagasc researcher, David Wall encouraged farmers to focus on the importance of soil fertility; value per unit nitrogen; and realising/maximising the true value of organic manures this spring.
Finally, IFA European director, Liam MacHale gave an update on the potential removal of anti-dumping measures which, are penalising farmers.
‘Crazy green policies’
Meanwhile, Rural Independent Group TD, Michael Collins has said that “farmers are on the cusp of losing farms due to financially crippling fertiliser costs, which are burying local farmers in debt, due mainly to “crazy green policies”.
The TD, who is a member of the Joint Oireachtas Committee on Agriculture, Food and the Marine, said:
“Irish farmers are experiencing a nightmare situation with input costs. Fertiliser prices have hit record levels in the last several months, with all three groups of nutrients — potash, phosphate and nitrogen — more than doubling and even tripling in some cases.”
He said that the main driver of increased fertiliser costs in the EU is record natural gas prices, due to the government’s agenda to “decarbonise electricity generation through overzealous and half-baked green policies”.
“EU policy to protect the continent’s fertiliser producers. by imposing import levies on fertilisers, is also having an impact,” he said.