Rocketing demand for dairy products in countries around the world should ensure that farmgate returns should remain buoyant for the opening months of 2014 at least.
There is a general acceptance that if milk does well, then the other facets of agriculture should get carried along in its slipstream. Given current circumstances, though, I hardly think that beef producers would agree with this sentiment. The fact that finished cattle prices have fallen back in the mouth of Christmas is both surprising and alarming in equal measure.
The reality is that livestock farmers cannot be expected to use their single farm payment, purely as a means of propping up their businesses, on an ongoing basis. Such an approach merely sounds the death knell for an industry that has the potential to deliver real growth within the economy as a whole.
Over the past number of months, AgriLand has attended numerous conferences with speaker after speaker highlighting the need for local farmers to become more efficient. And, in this regard, I have no argument to make – except to say that input costs on Irish farms continue at record high levels.
A case in point is the current price of concentrate feeds. Predictions made by the grain trade back in the autumn would have led one to believe that significant reductions in meal prices were on the way. Yes, the cost of some rations has come back by a certain amount but not to the extent that many farmers would have expected and hoped for. And let’s not forget that all of this is taking place against the backdrop of record maize and grain harvests in the US.
Moreover, the greater adoption of ‘fracking’ technology in North America is acting to direct less corn towards bioethanol production. Surely, this must mean that more grain is available for animal feed production.
The weather is, of course, the big factor over that local farmers have no control whatsoever. To date we have all enjoyed one of the most pleasant autumn and early winter periods in living memory. Let’s hope this continues into the early months of 2014. One of the most depressing memories for me from 2013 was that of watching sheep farmers pull dead lambs and ewes out of snow drifts, following the heavy blizzards that hit the North of the country in late March.