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More beef losses for 2010 warn Teagasc

MORE THAN two-thirds of farmers are likely to continue making a loss from cattle rearing this year, Teagasc has predicted.

However, sheep farmer incomes are expected to improve further because of the re-introd-uction of direct payments and increased budgetary support.

Teagasc economist James Breen said, despite a fall in the costs of inputs, profit margins on cattle farms were expected to be lower last year than in 2008.

He predicted that although cattle prices would increase this year, they were unlikely to return to the high levels experienced during 2008.

"We estimate that Irish cattle prices in 2010 will be 4pc higher than in 2009 due to continued growth in the live export trade, a diminishing EU herd size, the continuation of the effective ban on Brazilian beef exports and a gradual recovery in the global economy," Mr Breen said.

He said the new cattle pricing grid could also lead to a higher price for farmers who were finishing top-quality cattle.

However, he warned that this was likely to lead to a lower price for plainer stock.

Although concentrate feed and fertiliser prices are not expected to increase in the early part this year, Teagasc predicts rises in contracting charges and fuel and energy costs as a result of higher oil prices.

However, negative margins are expected to prevail on the majority of Irish cattle farms in the coming year.

"Cattle farms that currently earn positive net margins can expect to see those margins increase in 2010, while the losses on other cattle farms should decline," Mr Breen said.

The Teagasc Outlook 2010 conference also heard that the improved margins on all sheep farms last year would continue in the next 12 months.

Economist Kevin Hanrahan said: "The pattern of higher lamb prices and lower input costs observed in 2009 is forecast to be repeated in 2010, with average gross margins earned by mid-season lowland lamb producers increasing by approximately 7pc."

However, he warned that farmers should focus on the "market-based" elements.

He said analysis of margins earned on farms operating a mid-season lamb system highlighted the importance of high weaning and stocking rates in achieving better returns per hectare.

Irish Independent