Dairy bounce but grainmen stay in the red
Published 19/01/2010 | 05:00
Dairy farmers can look forward to a better year but incomes are not expected to return to "normal levels" until 2011.
However, although cereal prices are expected to recover in 2010, the net margins of the average producer will remain negative. Higher grain prices and lower costs will aid recovery in the tillage sector this year, Teagasc predicts.
But it may be 2011 before the sector returns to normal levels of profitability.
Darragh Clancy of its Rural Economy Research Centre in Athenry said that although there was considerable uncertainty regarding prices for the 2010 harvest, current futures prices suggested that cereal prices would be slightly higher than they were in 2009.
The gross margin per hectare on cereal farms is estimated to have decreased from €345/ha in 2008 to just €76/ha in 2009.
However, Mr Clancy indicated that there was some good news on the horizon.
"The price of key variables such as fertiliser, land rents and seeds are forecast to decline in 2010," he told the Outlook 2010 economics conference in Portlaoise.
"These forecast movements in input and output prices are expected to have a positive effect on margins for farmers in Ireland in 2010, relative to 2009."