This article is from page 36 of the 2012-01-24 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 36 JPG
CLARE farmers can look forward to another 12 months of decent farming conditions, with the level of growth likely to maintain steady into 2012. That is according to a new study released by Teagasc last week which indicated that the next 12 months will be a period of consolidation for local farmers.
The Teagasc Outlook 2012 Report found that the prospects for Irish agriculture, while still broadly positive, are not as good as they were at the beginning of 2011. The forecast for the sector as a whole remains highly dependent on circumstances in the wider EU and in the developing world.
Higher agricultural commodity prices over the last two years have made most sectors of Irish agriculture more profitable and farmers around the world have responded by increasing production.
However, with the EU likely to enter recession for a period in 2012 and the US economy also struggling, demand for agricultural commodities in advanced economies may weaken in 2012. This is likely to create a situation where most agricultural commodity prices fall slightly in 2012.
According to Teagasc economist Trevor Donnellan, little change is expected in overall production costs for most sub-sectors of agriculture, with lower feed prices being offset by increased fertilizer prices. “Overall, most Irish farmers are likely to experience a decline in profitability in 2012, but the sector will remain in a much better position than it was at the onset of the recession,” he said.
The pig sector, which endured considerable losses in 2011 due to high pig feed prices, is likely to be an exception to the general trend for 2012. Teagasc pigs specialist Michael McKeon said that profitability in the pig sector is set to be restored in 2012 as pig prices rise and the cost of feed decreases.
Despite these warnings, the ICMSA’s newly appointed beef chairman is optimistic about the price of beef in 2012. “The first thing to note is that farmers producing beef have been operating in a loss-making situation for many years and current prices are required to keep the farm business viable,” said Michael Guinan.
“Farmers are now operating in a more positive environment but that progress is coming from a very low base over the last decade and we should also acknowledge that we operate in an increasingly volatile market strongly influenced be outside factors, such as the current economic crisis.”