Product prices key to farm mood
A nationwide 425 farmers across all farming sectors, this is the first time the IFA has conducted a barometer as part of its newly published annual Farm Income Review.
Some 53% of respondents identify product price as the key issue they’ll face this year, with 25% citing the impact of Brexit as their key issue of concern.
IFA chief economist. Rowena Dwyer, said the outlook for dairy prices is positive, while beef will face challenging market conditions due to increased supply and the projected weakness of sterling. Sheepmeat and pigmeat prices will be stable.
National farm income rose by 2% in 2016 versus 2015. However, while the survey found 53% of farmers are optimistic about their own farm enterprise in 2017, just 40% are positive about the outlook for farming overall.
The report also raised concerns for export growth, which could be exposed to external shocks in Ireland’s main trading partners, the UK, euro or US economies.
“The findings show that farmers are more positive about their ability to influence the outcome on their own farming enterprise than they are for the general outlook for Irish farming,” said Rowena Dwyer.
While market returns fell across most sectors, a significant increase in direct payments boosted the survey’s optimism at a national level.
Sentiment also depended in farm schemes and the ongoing redistribution of the Basic Payment.
Dairy, pigmeat and poultry farmers are the most optimistic about 2017. After a difficult 12 months in 2016, some 85% of dairy farmers are positive and seven out of 10 pig farmers are anticipating a good year ahead.
By contrast, tillage, beef and horticulture farmers have more concerns for 2017. Some 83% of tillage farmers have a negative outlook for Irish farming for the next 12 months, while only one-third of beef farmers are positive about the coming 12 months.
Farmers are also watching for key economic indicators, such as consumer demand, investment confidence, the exchange rate, and, ultimately, producer prices.
The fall in fertiliser prices in 2016 may have a positive impact on the cereals sector in 2017; feed prices may remain low, due to strong supply from the 2016 harvest.
“Exchange rate volatility between sterling and the euro is certain to continue throughout 2017, as political events, such as the commencement of UK exit talks in spring, and elections across the EU, will impact on investor confidence,” said Rowena Dwyer.
“While there was a slightly more positive outlook for sterling as we entered 2017, the potential for it to fluctuate significantly on the back of political statements and events, as we have already seen in recent days, remains a concern.”
