Farm Ireland
Independent.ie

Monday 25 September 2017

Machinery sales drop sharply amid price crisis

Rural economy feels the pain as farmers suffer difficult year following milk and grain slump

The Clery brothers Michael (6) and Cillian (3) Clery from Birr, Co. Offaly were taking a brief pitstop from checking out the machinery at The FTMTA Grass & Muck Show 2016 at Gurteen College. Photo: Damien Eagers.
The Clery brothers Michael (6) and Cillian (3) Clery from Birr, Co. Offaly were taking a brief pitstop from checking out the machinery at The FTMTA Grass & Muck Show 2016 at Gurteen College. Photo: Damien Eagers.
Derek Casey

Derek Casey

Machinery sales have fallen sharply as the milk and grain price crisis grows, with farmers now facing major cash flow problems.

Pressure is mounting from farm bodies for action by the newly formed Government with the ICMSA warning the depressed milk price is resulting in a "haemorrhage" of money out of rural districts.

Retailers have warned of a "difficult" year, with machinery sellers feeling the pain with sales of balers, mowers, ploughs and sprayers all taking a hit.

It also comes as farmers call for action over pay at some of the country's processors and co-ops, with shareholders at the Arrabawn Co-op AGM the latest to demand "cuts across the board".

Milk suppliers at the Tipperary meeting called for a "sharing of the pain" from falling incomes for management, board members and staff as many reported being "shocked" after seeing their poor March milk cheques.

It also follows intense scrutiny of pay at many of the major agri businesses, including Ornua and Dairygold, as the packages of board members also came under the spotlight at the recent Glanbia AGM.

Agriculture Minister Michael Creed said he was very aware of farmers' worries about the future.

"Objectively, we know from a host of indicators that there is economic recovery. But I also appreciate that many farmers believe it has yet to come to their farm gate. It is our job to address that and spread the benefits of recovery all across the country," he said.

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Mr Creed said he was looking at a mix of measures to address the issue. He said EU Commissioner Phil Hogan had agreed an Aid to Private Storage scheme for milk powder and a longer term for paying the milk levy fine.

Government will talk to banks about greater forbearance on loans and co-operatives will be encouraged to develop low-interest credit modelled on Glanbia's MilkFlex scheme.

He was also working to end the EU tariff on fertiliser imports and the €25m aid scheme for sheep farmers was now a priority with payments likely next year.

Sales

Exhibitors at the Farm Tractor and Machinery Trade Association (FTMTA) Grass & Muck event reported the prolonged trough in milk prices, combined with poor grain prices, was now impacting machinery sales.

Manufacturers stated sales of grass machinery such as balers and mowers stagnated in recent weeks after an initial flourish in early spring.

The same is true of tillage equipment, with sales of ploughs, sprayers and power harrows behind on this time last year. However, tractor sales have remained on track with 1,036 new tractors bought up to the end of April, a rise of 6.5pc on the same month last year.

FTMTA boss Gary Ryan said there was still time for sales to pick up.

He stated it was unusual to have so many sectors "doing so badly in terms of prices at the same time".

However, he said despite the "perfect storm", exhibitors did make sales, with strong interest in machinery from the large crowds at the show in Gurteen, Co Tipperary.

Thomas Sheedy of Keltec Engineering, based in Kilmallock, Co Limerick, reported sales of bale loading equipment were well behind on last year.

"It's been a difficult year," said Mr Sheedy. "A lot of our customers are dairy farmers and their prices are on the floor." However, he said he remained hopeful sales may pick up if weather improves.

"The trouble is we can only afford to make to order - you'd much prefer to have consistent demand than a quiet spring followed by a late splurge," he said.

Sean Fitzgerald, Pottinger sales manager for Ireland, said there had been a slight slowdown in sales. "With mowers, tedders and rakes, we've seen a later start to the buying season but, overall, a surprisingly good season considering the challenging market."

Indo Farming