Supporting farmers with a strategic and long-term view
The dairy sector, notwithstanding the recent decline in milk prices, is still performing well and milk prices should average between 35c and 37c/litre this year. The increased milk deliveries this year may have a super levy impact for some, but overall, incomes should at least be on par with 2013.
By contrast, the cattle sector has sustained a challenging period over the past 12 months, with market prices declining considerably.
There are, however, signs that declining beef prices have now stabilised. Taken with the continued fall in feed costs, income in the sector may keep in line with last year’s levels.
Tight supplies in the sheep sector earlier this year resulted in prices ahead of 2013. Supplies are increasing which is impacting on price. However, decreases in feed prices should serve to maintain margins at least at 2013 levels.
After a sustained period of low or negative margins, the pig sector has seen a much-needed rebound in margin.
The declining feed price since the second half of last year resulted in the feed/price ratio moving into positive territory.
The increase in pig prices since early May this year is adding to profitability in the sector.
While the moderation in feed prices is serving to support margins across all livestock sectors, it is not a welcome development for the cereal sector.
The downward trend in global cereal prices is reflected in Irish grain prices, which are well back on last year. Given the price which has been paid for conacre, at current grain prices it may be a challenging year for those producing off conacre.
While the outlook is somewhat mixed for individual farm sectors this year, the medium to long-term outlook for the farming sector remains positive. AIB has always taken a strategic, long-term view of the sector and has supported Irish farmers in times of both opportunity and challenge.
In AIB, we are committed to supporting the continued development of the sector. We recognise that the investment taking place in the sector, particularly in dairying, requires strong bank understanding and support.
To underline our commitment to the sector, AIB has put in place a €500m agri-fund to help finance farm development, working capital and asset finance, across all sectors.
We have always sought to support farmers with a specialist understanding of their business and we have had a team of dedicated agri-advisers since at least the early 1970s.
To ensure we can meet the growing needs of the sector, we have recently doubled our team of advisers to 12, recruiting three agriculture graduates and three agri- advisers with strong industry experience.
In Limerick, Diarmuid Donnellan joins our team from Teagasc where he was a business and technology drystock adviser.
Bryan Doocey joins AIB in Cork from Arrabawn where he was agri-business sales manager and Barry Hyland joins AIB in Cavan from ACC bank where he was senior agri- banking manager.
AIB has a long association with the agricultural sector and we are seeking to grow our business in this key sector.
We remain committed to doing our part to support the sector as it continues to develop.
