Hard-hit Northern beef farmers switching to dairy as outlook for milk improves, says bank
Northern Ireland's dairy farm industry is growing amid improving conditions for the sector, the head of agriculture at Ulster Bank has said.
There are now around 3,500 dairy farms, with hard-hit beef farmers also reported to be switching to the more stable business of dairy.
Speaking on the first day of the Balmoral Show, Cormac McKervey said that while the milk price average has remained at around 25p per litre over the past decade, he expects the amount paid to farmers to begin to rise later in the year.
Around four years ago dairy farmers were facing problems, as milk was selling for just under 19p per litre.
But the price has recovered gradually, and according to the Department of Agriculture, Environment and Rural Affairs, a price of 27.18p was being paid in March.
Northern Ireland exports £323m worth of milk every year, with May the peak month for output.
"If milk prices are coming up and feed prices are falling back, then the margin will improve.
"Over the last 12 months things haven't been great, but looking forward, things look better."
And he said the prospect of Brexit was also influencing some farmers to make a move into a different sector.
"There are also farmers coming out of beef production and into dairy, because it's just not generating the profit.
"There has been growth in the number of farmers milking, with the average size of herds now around 95 cows.
"Beef farming is also heavily reliant on the single farm payment, and if that is to wind up, farmers are making the decision to move into dairy."
The outlook also looks good for the local pig sector. While feed prices are coming down, the African swine fever epidemic in China has also created a massive hole in the market as a result of widespread culling.
"China domestically can't support that market, they're going to have to import," he said.
"Obviously there's a trade war with America, so they will do business with more European pork. Pig prices will go up, input costs are going down, so the margin on pigs is a good news story."
And despite Brexit, demand for farm land remains high, driving prices to record levels. Last year saw the average price for quality farm land pass £10,000 per acre for the first time. "It's a sign that farmers still want land and there's a fantastic market for it," said Mr McKervey.
"It grew by 4.4% last year despite the uncertainty over Brexit.
"When it comes to land, farmers are still keen to buy it."
However, the Ulster Bank manager painted a gloomier picture for the poultry sector.
It is suffering from a double whammy arising out of cuts to RHI tariffs and what appears to be an easing back on demand from broiler houses by chicken giant Moy Park.
For Stories Like This and More
Download the Free Farming Independent App