Farmers in Northern Ireland impacted by bovine tuberculosis (bTB) are coming under a significantly enhanced cost burden at the present time.
Figures produced by the Ulster Farmers’ Union (UFU) indicate that the herd incidence rate for the disease now exceeds 9%.
Cormac McKervey, head of agriculture with Ulster Bank in Northern Ireland, commented: “Given the high cost of feed and fertiliser at the present time, the cost of keeping additional stock on bTB-affected farms is mounting significantly.”
Cost burden
Meanwhile, agriculture in Northern Ireland has entered 2023 with the level of sectoral borrowings unchanged, relative to the previous 12 months, and deposit levels remaining strong.
Cormac McKervey, is confirming that it all adds up to a pretty healthy financial picture.
Total borrowings in the form of loans and overdrafts are currently sitting at around £1.1 billon. So this is very much a ‘steady-as-she-goes’ picture.
“Monies on account, however, have risen steadily in recent years. That figure currently sits at around £500 million. So the farming industry has been performing well over the past year,” McKervey added.
Where the various sectors are concerned, McKervey explained that dairy, beef, poultry and sheep were not experiencing any major issues. However, the pig industry is still facing challenges.
“Finished pig prices have levelled-off at around £2/kg. We need to see this price kick on in order to get producers back into profit,” he commented. “Only then will they be able to start paying back the outstanding feed costs that have mounted up over the past number of months.”
“The new year has seen no change in local milk prices. However, international dairy markets have been coming under some pressure. And these developments may well impact on farmgate returns here in Northern Ireland over the coming months.
“Beef prices remain exceptionally high. Yes, there has been a slip in hogget prices over recent weeks, but the general prospects for sheep remain strong.
“The poultry industry continues to perform well with free range egg producers receiving good farmgate prices at the present time and thankfully the feed tracker has insulated them from the spike in feed costs.”
Input costs
According to McKervey, farmers are getting acclimatised to the very strong input costs that have characterised all the commodity markets for the past 12 months and more.
“One very obvious indicator of this is the fact that merchant credit has not increased significantly despite the massive increase in feed and fertiliser costs,” he said.
“But challenges do lie ahead, one of these being the implementation of an official plan to deal with ammonia.
“The Department of Agriculture, Environment and Rural Affairs [DAERA] has recently published its proposals in terms of how the ammonia challenge that confronts agriculture can be addressed,” he continued.
“The issue here is that fundamental change is coming down the track in terms of how planning permission will be handled, where future farm development programmes are concerned.”
According to McKervey, the current single payment support system is guaranteed until 2024.
“Change is coming here as well,” he confirmed.
“And it is important that farmers are provided with a degree of certainty on this matter as quickly as possible.”
Where climate change is concerned, Cormac McKervey believes that farmers should start to carbon audit their businesses now.
“However, the issue of climate change will have no bearing on how the banks deal with their farming customers at the present time.
“Carbon audits and starting the journey to lower emissions is not something to be afraid of. Northern Ireland has a good story to tell and the sooner farmers start the journey , the better.”
