Farm Ireland

Tuesday 22 January 2019

Farmers under siege from soaring costs

Winter of discontent ahead as triple whammy of rising feed, fuel and fertiliser prices kicks in

Siobhán English and Claire Fox

FARMERS are facing a financial crisis ahead of the winter as the full impact of this year's extreme weather becomes apparent, farm leaders have warned.

The IFA and ICMSA estimate that input costs have risen on average by between 10-15pc this year and this figure could rise further due to potential fodder shortages over the winter months.

"When you look at it across the board, overall costs are up by some 15pc," said IFA Inputs Committee chairman John Coughlan.

"That also includes fertiliser, electricity and fuel. For a farmer on less than €30,000 it is not sustainable."

Feed prices have increased by between €30-€50 on last year and silage and straw are "like gold dust" in some areas.

Securing fodder supplies is the most urgent issue for farmers in the south and east where grass growth is lagging well behind seasonal averages.

"In many regions fodder prices have doubled compared to 12 months ago," said Mr Coughlan.

"Silage bales are trading at €30-40 a bale or higher and hay is at €40. Fodder prices aren't sustainable at the moment. There's a lot of panic there and in some cases farmers are holding on to what they have.

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"All input costs have risen dramatically over the last 12 months and are continuing to rise. Farmers are under a lot of pressure."

Sourcing fodder, even at inflated prices, is also a problem.

Kilkenny IFA chairman James Murphy told the Farming Independent that no fodder is available for sale in his county and parts of neighbouring counties.

"The most significant deficit without a shadow of a doubt is in the south -east," he said.

"Grass growth has been stubbornly poor and straw is like gold dust. You can't help but worry. It really is a seller's market and will remain that way."

The beef sector is hardest hit as it is also facing a slump in prices at the marts.

Poorer Friesians are now back by upwards of €200/hd in places on 2017 prices.

The factory squeeze on prices is also beginning to affect the trade for heavy bullocks which are €90/hd below last year's mart prices at this time.

Forward 500-599kg stores are back by €60-72/hd with the 400-499kg bullock back by €96-120/hd, while the 300-399kg bullock has taken a €165-220/hd hit.

'Family crisis'

ICSA general secretary Eddie Punch said the situation is so serious that the organisation is unveiling a fodder crisis family support initiative. He warned the "strain and stress" was beyond what some farmers could cope with and the "fodder crisis is turning in to a family crisis".

ICSA rural affairs chair Seamus Sherlock said he was receiving 30 to 50 calls a week from farmers, with some feeling "desperate helplessness". "It is having a huge negative effect on family life," he said, stating some under pressure farmers were ringing him at midnight.

The ICMSA, which met the Minister for Finance Pascal Donohoe yesterday, is calling for the urgent introduction of a low-cost loan scheme for farmers to tide them over the current crisis.

"The continuing non-appearance of the Brexit Low Interest Loan Scheme is becoming a matter of real concern," said ICMSA president Pat McCormack.

"This is the obvious mechanism to address the cashflow crisis on farms and needs to be opened for applications as soon as possible.

"We've asked the Minister to reconsider urgently and accept the reality that farmers desperately require access to low interest funding immediately and regardless of what purpose the fund was originally designed for," said Mr McCormack.

The ICMSA estimates that average farm input costs have risen by 10pc but Mr McCormack said the "volumes involved are the critical issue" and have led "to a massive increase in costs" on some farms.

"We need to broaden the picture here in terms of the fallout from the drought and fodder shortage.

"The southern half of the country is the worst affected at this stage and the Minister should introduce a fodder transport scheme like the one he introduced last Spring.

"Any surplus fodder in the northern half of the country could be brought south at a reasonable price level. Farmers need every support to boost fodder levels and a national scheme should form part of this response," added Mr McCormack.

On the tillage front, Carlow-based consultant, Pat Minnock, said that crop yields have improved slightly in recent weeks, but some grain intakes are still down 30pc on 2017.

"Some of the later yields of spring barley did improve - with some 1.6-2.1t/ac - but these are well down on 2017 where we had 2.6-3.4t/ac.

"There is some consolation, however, as while yields are down, prices are well up, including those for spring barley which are up to between €140-€220/t."

Tillage farmers have also been able to recoup some losses with the significant increase in prices for straw, in some cases treble on 2017.

However, fertiliser prices continue to be an issue across the board with prices predicted to rise by up to €20 a tonne after Yara increased wholesale prices for CAN.

The IFA is campaigning in Brussels for the suspension of customs tariffs.

"Our campaign is ongoing and we want to see these tariffs reduced considerably," said John Coughlan.

Meanwhile, there is some positive news for dairy farmers as there are strong indications this week that August milk prices will rise on the back of falling supplies in some key European markets.

Indo Farming