Farm Ireland

Thursday 18 January 2018

Agriculture is booming but star could fall

Darragh McCullough

Darragh McCullough

The Ploughing Championships have become the fish bowl that the rest of the country peers into once a year for a peek at their country cousins.

It also provides the perfect one-stop shop for the normally urban-centric media to tap into the collective conscience of the agricultural sector.

So it was somewhat predictable that in the scramble for the soundbites that would sum up the scene, phrases such as 'bumper year' and agriculture being 'the new star' would be bandied around.

It is refreshing to have such positive messages coming out of the sector, and it is giving young, aspiring farmers massive confidence, which can only be a good thing for securing future generations of farmers.

But there is also a rising concern among farmers, especially those who've seen successive 'new dawns' in agriculture come and go many times before, that the good times in farming could be in danger of going the same way as the property boom that gripped the country not so long ago.

Farmers are feeling very bullish about their prospects over the next 12 months as China in particular and Asia in general continue to drive demand for every type of food.


Those dairy farmers who are still on the right side of 40 and have potential to expand are probably the most confident people in the wider farming sector right now. Even if prices came back slightly, he or she feels that the scope for expansion over the coming years will more than compensate. They are being told that Ireland, with its ability to grow plentiful amounts of grass, should be one of the most cost-competitive places in the world to produce milk.

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So what's not to like? Just as JFK's dad got nervous right before the Wall Street crash in 1929 when a shoe-shine boy asked for advice on what shares to invest in, there is a risk that everybody believes there's a fortune to be made from farming right now.

Look at weanlings making €1,000 a head, hoggets making double what they were worth two years ago, the scramble for conacre and the milk quota making 50c/l. While property prices in the rest of the economy continue to contract, farm land looks like it has strengthened in value over the past six months.

Strong farm prices could last for another couple of years yet, but they could just as easily tumble to some of the lows we've witnessed in recent times. Now may be the time to walk while the crowd begins to run.

Indo Farming