Prices farmers are paid for the commodities they produce are being “wiped out by unprecedented increases in the cost of inputs”, according to the Irish Farmers’ Association (IFA).
Despite increases in prices across a number of commodities in the last 12 months – as reflected in data released by the Central Statistics Office (CSO) – the IFA noted that input costs are up 40% on last year, overshadowing the 30% increase in commodity prices in the same period.
Rose Mary McDonagh, the association’s farm business chairperson, said: “It’s simply just not sustainable at current levels, and the fear is over where costs will go in the months ahead with all the volatility on international markets from multiple perspectives.
“Farmers cannot be expected to carry on regardless. Many operations will simply go out of business if targeted measures aren’t introduced.
“Unlike others, farmers don’t have the luxury of being able to pass on the added cost of production to others, and so cannot be left to carry all the risk,” McDonagh argued.
The CSO figures show that aggregate agricultural output prices rose 1.7% in June versus May levels, with a 8.1% increase in pig prices seen as the main driver.
On an annual basis, aggregate output prices were up 29.8% in June 2022 compared to June 2021, with positive gains reported across several sectors, including cereals (+34%); beef (+27%); pigs (+8.2%); sheep (+12%); poultry (+7); and milk (+44.7%).
However, the IFA stressed that the benefit of these increased output prices has been superseded by the “phenomenal rise” in agricultural input prices – up 40.2% year-on-year.
“This means any farmgate price increases are completely eroded and more with it. Although they are showing some signs of easing, they are a long-way off normal levels,” McDonagh said.
The largest annual price increases were in select fertilisers (+181.6%) and feedstuffs (+45.6%), with motor fuel (+10.2%) recording the largest monthly increase.
The IFA farm business chair commented: “Budget 2023 will show how much the government truly understands the on-farm challenges arising from the input price hike.”
McDonagh stressed that a series of tangible measures will be required, along with the retention of key existing agri-taxation reliefs and measures to minimise on-farm costs of production (including the farmer carbon tax rebate).