Soaring demand for food boosts outlook for most commodity prices

SOARING global demand for food coupled with supply difficulties in southern hemisphere countries is boosting the outlook for most commodity prices, according to analysis delivered at the Teagasc Agricultural Economics Conference in Portlaoise.

Head of the Teagasc Rural Economy and Development Programme, Dr Cathal O’Donoghue, said: “2010 was a very good year for Irish farmers with output values up for all sectors, and the average family farm income for 2010 is expected to return to 2008 levels, a 40% increase on the 2009 level.

“Food exports have been very strong, with agri-food exports growing faster than other exporting sectors.”

Thia Hennessy, head of the Teagasc Agricultural Economics and Farm Surveys Department, said: “The outlook for 2011 is for continued buoyancy for most commodities, however rising fertiliser, fuel and animal feed prices are likely to negate some of this increase, leaving some farm systems no better off in 2011.

“Only dairy farmers are forecast to have sufficient increases in output prices to offset the increase in input prices.”

Last year was described as a bumper one for dairy farmers with production and prices up. The outlook for milk prices for 2011 is good, with strong demand forecast.