Farm Ireland

Thursday 27 October 2016

Survey reflects widening drystock-dairy divide

Published 18/11/2015 | 02:30

Cattle prices are up.
Cattle prices are up.

2015 looks set to be the year of the drystock farmer, with cattle prices up by 12pc and key inputs such as diesel and feed down in cost.

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Following discontent at the factories in 2014, cattle farmers fared have much better this year, with Central Statistic Office (CSO) figures showing a 12pc increase in prices on the back of a strong Sterling and 100,000 fewer head available for slaughter.

However, the good fortunes of the cattle sector are contrasted by the fall in dairy incomes, and a 23pc slump in prices.

Lakeland Dairies announced last week that it was holding its October milk price, and other processors are expected to follow suit.

The dairy income slump has materialised despite an unprecedented jump in output from the sector. Milk supplies are expected to be over 600m litres higher this year, equivalent to an 11pc increase.

Half of this increase is due to an additional 50,000 cows being milked, while the rest of the increase is due to improved feeding as farmers looked to maximise output following the removal of quota. Improved feeding also helped constituents increase to record highs, with both fat and protein levels up by 0.1pc to 4.04pc and 3.5pc.

This equates to an extra 1c/l, or €62m in the milk cheque.

"We still don't really know what, if anything, people made from the sales of extra milk," commented Teagasc economist Trevor Donnellan. "It's only then that we will be able to judge the potential of the dairy sector to sustain more increases in output in the future."

Meanwhile, pig and cereal farmers suffered falls of 8pc and 5pc in their incomes to date this year, according to the CSO.

Overall it estimates agricultural prices will be down by just 3.5pc, with an 11pc slide in energy prices mainly due to diesel prices. Feed prices were also down by 5pc for drystock, largely due to the fall in grain prices in the 2014 harvest. Potato farmers saw the biggest lift in prices.

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