Farming

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Struggling on ...but it could be a lot worse

The mood among farmers at this week's Ploughing Championships will be a lot more downbeat than 12 months ago, but the outlook could have been a hell of a lot worse.

The improvement in the weather since the end of August has certainly lifted farmers' spirits.

The fact that this provided a window in which to save the harvest was an added bonus.

However, serious difficulties remain right across the various enterprises. The lift in input costs, particularly feed and fertiliser, has eroded margins and hit confidence.

In the case of cereal growers, the sharp rise in seed prices has been a further blow after a very difficult harvest. While grain prices were strong this year, yields and quality were poor and many farmers are struggling to do deals on forward contracts agreed with merchants.

Leeway

Some leeway will have to be forthcoming from the trade on these contracts if farmers are to be persuaded to increase the volume of grain that is sold forward.

Similarly, there is real anger among dairy farmers that Kerry, Dairygold and Connacht Gold have failed to increase milk prices for August despite world markets becoming decidedly stronger over the last month.

In their defence, processors claim that they have product sold forward at the lower prices of earlier in the year.

As a consequence, they say they are unable to react to price changes on a monthly basis.

They also point out that they held prices through the back-end of last year.

But there is a belief among dairy farmers that processors should have moved quickly to raise milk prices, given the hammering that incomes have taken this year.

Returns from beef and sheep remain relatively strong but higher input costs and weaker factory quotes have shaken confidence here too.

North Africa

There is also a fear that the meat plants will pull prices further at the first sign of a sustained lift in cattle supplies.

Figures from the CMMS would suggest that cattle numbers increase sharply next spring.

It is clear that a market for these additional stock will be needed.

The live trade to North Africa is an option, but there are hurdles to be cleared before this gets the green light -- the first of which is clearance of a boat by the Department.

It is rumoured that an announcement on an AEOS for 2012 will be made by Simon Coveney this week. This would be good news, even if AEOS is a pale shadow of the old REPS.

Good news is in short supply these days.

Indo Farming