Farmers to invest €1.12bn next year

FARMERS are planning to invest €1.12 billion on their farms in 2008, according to a survey carried out by the Teagasc Rural Economy Research Centre.

Teagasc economist Liam Connolly told an agri-economic conference in Tullamore yesterday said the survey carried out this autumn showed that over 32,000 farmers plan to invest an average of €34,500 on their farms next year.

Farm buildings account for over 80% of this planned farm investment for 2008.

This comes on top of a high level of investment made by farmers in their businesses in 2007. The actual investment in 2007 exceeded expectations and totalled €1.3bn.

Mr Donnelly told the agricultural situation and outlook conference that dairy farmers account for the bulk of the investment.

Teagasc director Professor Gerry Boyle said overall farm income in Ireland increased in 2007 but the story of farm income on Irish farms is a mixed one.

“The improvement in dairy income is extremely welcome and the rise in cereal prices is positive, but beef, sheep, pig and poultry producers face a more difficult market situation,” he said.

Teagasc economist Thia Hennessy said the average milk price for the year is estimated to be more than 25% higher than the average 2006 price.

With substantial increases in milk price and only marginal increases in costs, net margins on dairy farms are expected to increase from 7 cent per litre in 2006 to almost 13c per litre in 2007.

“Net margins for 2008 are estimated to be 10c per litre,” she said.

In relation to beef, Teagasc economist Liam Dunne said the current year was the first time since decoupling in which Irish cattle farmers were fully released from the knock-on impacts of animal based direct subsidy payments, but they simultaneously experienced a year-on-year decline in cattle prices.

“A recovery in cattle margins to about 2006 levels is anticipated next year, driven by the combination of an increase in cattle prices and realignment of the input mix,” he said.