independent

Friday 25 April 2014

Cereals prices increase most, but poor yields hit incomes

Cereals prices paid to farmers rose by 16.5pc this year, compared to 2011, according to provisional figures from the Central Statistics Office (CSO).

Cereals were the best performing farm output during the year, with cattle prices rising by 11.6pc and milk prices increasing by 9.8pc.

However, the rise in output prices was exceeded by a corresponding increase in the cost of farm inputs such as feed, fertiliser and chemical sprays.

The survey found that output prices rose by 3.6pc on average during 2012 but farm input costs rose by 4.2pc during the same period.

While the CSO figures might indicate that the year 2012 was not as bad income-wise as many farmers perceived, the findings have been challenged by IFA.

The association's chief economist Rowena Dwyer pointed out that while dairy and tillage prices might have increased during the year, farmers suffered reductions in the volume of milk and tonnage of grain that they sold.

She explained that milk output and cereal yields had been seriously hit by the atrocious weather during the summer.

"The CSO figures take no account of the volume of milk, grain or beef that was sold," she explained.

"They also take no account of the volume of farm inputs that were used by farmers this year."

For example, dairy farmers were forced to feed significant amounts of concentrate feed because of disastrous summer grazing conditions.

Despite this extra feeding, milk yields were still below 2011 levels. National milk deliveries were down 2.5pc between January and October 2012 compared to the same period in 2011.

It was a similar story in the tillage sector, where grain prices rose by 16.5pc but grain yields fell by as much as 25pc.

New farm income figures from the CSO, due to be published next week, will give a much clearer picture of the farm income drop suffered by farmers during 2012.

ICSA president Gabriel Gilmartin says the CSO statistics underline the need to address the continued rise in farm input costs.

"There are steps the Government can take to address the issue of steadily increasing input prices. For example, ICSA has argued that the taxes and duties on fuel in particular are not only a huge burden on farmers and other diesel-reliant businesses, but are also damaging the Exchequer by encouraging those who can to purchase their fuel outside of the jurisdiction," Mr Gilmartin said.

"ICSA's pre-Budget 2013 submission calls for a suspension of the carbon tax, which is coming in at over 6c per litre on green diesel, or €20/t – up from €15/t earlier this year. This seriously hinders the ability to produce at competitive prices."

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