Low prices forcing beef farmers to switch grazing land to forestry
A huge acreage of good quality grazing land will be planted in the coming years as a result of poor returns from beef, a leading agricultural advisor has predicted.
Responding to the findings of Teagasc's Annual Review and Outlook 2017, Eddie McQuinn said there was increased interest among drystock farmers in forestry and he predicted that planting would become even more popular as profit margins in beef remained low.
Although the Teagasc study found that gross margin in single suckling and cattle finishing rose to €464/ha and €461/ha respectively, McQuinn pointed out that these returns were based on direct payments rather than profits from farming.
McQuinn said the onus was now on politicians to deliver greater transparency in the beef trade, and specify exactly how much the farmer, the processor and retailer makes from each animal. "Serious capital investment is required on drystock farms but the absolute return from beef is extremely low and forecast to fall by 19pc next year," he pointed out.
He said that if the beef industry wanted to retain primary producers it would have to take some of the volatility and risk out of the business by developing some form of fixed-price contracts.
The Tralee-based advisor said farmers would opt for the certainty of forestry over the vagaries of beef prices if no action was taken.
"There is a natural progression among small dairy farmers out of milk and into drystock farming. But as these farmers get older and there is no one to take on the farm, and the returns don't justify a son or daughter coming home, then these land owners are increasingly opting to plant the land," McQuinn explained. "It is a very pragmatic and logical move in that the farmer is guaranteed an income for 20 years or so, and the land stays in the family."
Under existing plans, Ireland aims to increase the level of forestry cover from 11pc of the country's total area to 18pc. This will require an additional 480,000ha of land planted.