Majority of farmers put expansion plans on hold
Published 21/09/2016 | 02:30
Low incomes and poor profitability has hit investment plans at farm level, with six out of 10 farmers indicating that they intended holding investment at current levels over the coming 12 months.
A survey of 250 farmers carried out for Bank of Ireland found that 59pc of respondents would not increase on-farm spend over the next year.
But younger farmers are more ambitious, with three in five (61pc) of those aged under 50 planning to grow the business over the coming years.
Asked about their plans for expansion over the next three years, 44pc said they aimed to maintain operations at the current level, 43pc intended expanding, while 13pc said they would scale back.
One in four of the farmers surveyed said they planned to increase investment over the next 12 months.
Replacing and upgrading buildings, equipment and vehicles and purchasing livestock for investments.
"The results show that a large number of farming businesses are on a growth track.
While most of those planning on expanding over the next one to three years are likely to do so cautiously, the rest are set to actively pursue opportunities to grow," claimed Dr Loretta O'Sullivan, Bank of Ireland's chief economist.
The data points to some pressures on the input cost front. Excluding labour, but including inputs such as feed, fertiliser, fuel, veterinary and land rental, 46pc reported that costs had risen over the past year.
The picture is more mixed when it comes to the prices farmers expect to receive from the market. Half of farmers expect to see a drop in prices over the next year, with 18pc expecting an increase.
Fifty-eight percent of dairy farmers anticipate increased prices over the next 12 months, whereas 68pc of cattle farmers expect prices to fall.
Meanwhile, 25pc of respondents expect to see an increase in output over the next 12 months, with 62pc expecting no change. One in three saw an increase in farm output over the past 12 months, while 52pc held output.