Farm income to rise by little more than 10% over the next decade

AGRICULTURE income in Ireland and the other older EU member states will rise by little more than 10% over the next decade, while new member states increase at around 40%, bringing them closer to EU average incomes, according to a report prepared by the European Commission.

Figures for meat, milk and dairy products are mixed but hold some positive news for Irish producers, especially for poultry, pig, whole milk powder and cheese.

The report, which comes at a time when commodity prices are increasing in global markets and the EU is preparing for its major review of farming subsidies, is not a forecast as such but more a help to understand medium-term market developments.

Meat production is expected to recover from the current drop in consumption because of the economic crisis but the report warns that longer-term growth prospects remain modest at an annual rate of 0.3% on average.

Beef and veal production is expected to drop by 7% and sheep and goat meat by 11% with pig and poultry meat production expected to increase by 7%.

There will be a steady increase in meat imports including beef and poultry of about 14% by 2020 and a 23% decline in exports of beef, pig and poultry.

Milk production is expected to increase moderately but by less than 4% from the EU 27 by 2020 over 2009 levels.

The outlook for higher value added goods such as cheese and fresh dairy products appears to be better with cheese output expected to grow by 10% and the other fresh products including cream and yoghurts by around 8%.

The prospects for cheese exports are good, despite a strengthening euro with the EU maintaining its share of global cheese exports at above 30%.

Whole milk power production is expected to fall only marginally below its 2009 level but lose global market share declining from 24% last year to 21% in 2020.

Prospects for skim milk power exports are less favourable coming under pressure from a strong currency and other exporters.

The picture for arable crops is relatively positive with tight market conditions, low stock levels and prices above the long term averages.