Farming

Wednesday 30 July 2014

Farmers will look back on 2012 with a shiver – but it wasn't all bad news

John Shirley

Published 18/12/2012|05:00

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Another budget over and another year nearly gone and what have we to show for it? In years to come what will the historians make of 2012? Did anything significant happen? Are we making mistakes which will only be recognised retrospectively when it's too late to correct them?

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Hopefully we haven't repeated the blunders such as the benchmarking of 2002 or the bank guarantee of 2008. At best we just muddled along, slowing down the rate of national debt increase.

Katie Taylor, Donegal's footballers, and Rory McIlroy will all look back on 2012 with a warm glow.

Irish farmers will more likely view 2012 with a shiver.

But it wasn't all bad. The first few months were quite promising. Beef and store cattle prices hit new heights. A warm, dry spring saw crops planted in ideal conditions and early grass growth was unprecedented.

"We'll pay for this later," was the common refrain from the naysayers and they were right. The debate continues as to whether 2012 was the worst summer or just one of the worst in recent memory.

Those who espouse the climate change theory will point to multiple global weather occurrences including October's Hurricane Sandy in the US to back their case.

Equally, Ireland continues to be buffeted by the economic storms. We saw little shift in unemployment, property prices, budget deficits.

Maybe the weather and economic challenges of 2012 represent the new norm for Ireland.

This is how it's going to be for the foreseeable future. We just have to suck it and get on with life.

Agriculture is not the worst sector of the economy relative to others. Of late, the world's food demand/supply balance has been tipping towards the primary producers.

This is leading to volatility and uncertainty, but with a few nice price spikes as well.

The tight supplies of beef and sheepmeat, both domestically and internationally, saw record prices to Irish farmers over the past two seasons.

To date in 2012, the Irish factory cattle kill is back by a massive 180,000hd or by 12.2pc on the 2011 throughput. 2012 beef prices to the farmers were up 12-14pc on the previous year.

It is expected that the tight Irish cattle supply will continue till about June 2013. What will happen then?

Endure

It's vital that prices are not allowed slip back to the levels of the bad days. Current costs of meal, fertiliser and oil couldn't endure former beef prices.

Compared to 2011, sheep prices took a major hit from late March to June when excess hoggets spoiled the party. Mid-summer prices held well for finished lamb but the trade for light store lambs, especially mountain cross lambs, collapsed.

The small recovery in the Irish sheep flock also saw the excitement in breeding sheep fizzle out. Like cattle, sheep prices need to hold at this summer's level of €5/kg or €100 for the factory lamb, to keep farmers interested.

At the start of the season there were bad vibes on milk price as the world's supply seemed to be expanding faster than consumption growth.

Then came the US drought. Milk price slipped, but not as badly as predicted. The same US drought, allied with the cold and rain in Western Europe, put the Irish grain and feed train into a tizzy.

When 2012 is viewed in hindsight I reckon that the abiding image will be one of having to house cattle in mid-summer and the millions lost by growers from selling their grain before the prices took off.

In spite of the bright spots it looks as if farm incomes will be down somewhere between 10pc and 20pc.

Indo Farming

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