Things can only get better. But what about Brexit?
The farming business is punch-drunk even before the Brexit bout begins.
Perhaps farmers are better off to be feeling numb before they are hit by the runaway train of a no-deal Brexit leaving them depending on EU help.
In that event, first aid will be badly needed.
Farming got a brief respite in 2017 when relatively high incomes for the 18,000 dairy farmer helped to raise all boats a little.
Unfortunately, that was was only the first round of a contest in which Irish farmers have come up against much more powerful forces than they can muster.
Round Two was the longest winter ever, which left many livestock farmers with empty pockets and rising debts.
Farming fought back in Round Three, the month of May, when suitable weather allowed a start to rebuilding winter fodder stores, while crops were put in the ground, although too late in many cases for maximum yield potential.
At least the sun shone in Round Four, but it went on too long, and got hotter and drier than farmers could bear.
It turned out to be the hottest summer in 42 years, and its effects will be felt well into next year by farmers already weakened by the previous winter
It’s half-time in the fight, and the Teagasc mid-year outlook sums up how farming is managing ahead of the referee’s ruling on Brexit.
The Teagasc mid-year outlook confirms that dairy farmers won’t be riding to the rescue this year, and are instead licking their wounds, including a likely 60% reduction from the relatively high profit margins of last year.
That is, if they can scrape a net profit margin of about six cent per litre, which is contingent on the drought burned grass recovering from now until November.
Even after the drought setback, the average dairy farm income is likely to be about €45,000 in 2018, according to the Teagasc mid-year outlook predictions.
But just how tough it is for them getting through the drought is reflected in a prediction of production costs for 2018 rising 23% for the average dairy farm.
It’s one the government and food industry have to watch carefully. Dairy cow culling is on the increase, suggesting the herd will shrink in the coming months, and Irish milk production will falter in 2018, a major setback for this star of the food industry which has boasted increasing exports for so many years.
Then again, beef exports have gone fairly well also, even though beef farmers haven’t. But could this be the year to break the endless resolve of beef farmers, with Teagasc predicting their profits will shrink another 6-9%. It’s much the same story with sheep, with an 8% decline expected in profitability. Hence the sheep farmers’ valid point that they cannot afford the electronic identification traceability the government wants introduced on October 1 — probably the same date they will discover if Brexit ends their export trade to the UK.
It is estimated that the average 2018 family farm income on specialist tillage farms will be down about 25% on the 2017 level. As if that wasn’t bad enough, the reduced domestic cereal crop, along with a reduction in global grain stocks, will continue the rise in feed prices evident in the first half of 2018.
That’s particularly bad news for our pig farmers, paid the fifth or sixth lowest carcase prices for pigs, out of 26 EU member states.
They have been struggling for seven months of loss-making prices, and pigmeat processors are still cutting what they pay for pigs.
An optimist would say things can only get better for farmers.
But a pessimist would note that the government and food industry are looking over their shoulders at Brexit with their fingers crossed, and have little time to tend to the problems of the farmers who supply the raw materials.
In that context, this week’s move by Supervalu to cover the extra heat wave costs of their vegetable growers is all the more praiseworthy as the one light shining amidst dark prospects for farmers.
