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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

The number of people employed in agriculture, food, forestry and fishing is 168, 600 (CSO Q3 2014 data). This compares with 166,900 for the same quarter of the previous year. According to the Dept. of Agriculture, Food and Marine (DAFM). The agri-food sector accounted for around 9% of total employment in 2014. It clearly makes a significant contribution to employment in rural areas.

There are 139,860 farm holdings in the Republic with an average size of 32.7 hectares. (Census of Agriculture 2010) The total land area is 6.9 million hectares - 4.5 million ha is used for agriculture and 730,000 ha for forestry. 81% of our farmland is in pasture, hay and grass silage, 11% is rough grazing and 8 % is in crop production. The area of land planted under forestry in 2014 was 6,156 Ha. The average price of land for sale in 2014 was estimated to be €9,890/acre

The value of agri food and sector exports increased to €11.3billion in 2014, accounting for 12.7% of all exports. Even more significantly, the profile of trade has changed dramatically in recent years. Shipments of food and drink to international markets outside of our traditional British and EU markets increased by 15% in 2014, to a value of around €3 billion. The growth in exports was led by Asia,

which showed a rise of almost €270 million in value, to reach €850 million for the first time. Within this, China recorded a further jump of almost 40% to reach around €520 million.

Exports to north America were 18% higher and the Middle east and Africa showed increases of 11% and 9% respectively. Strong export performances were recorded in prepared foods (+ 8% to €1.8bn year on year) dairy products and ingredients (+3% to €3.1bn), seafood (+9% to €540m, poultry (+20% to €310m), pigmeat (+3% to €570m) and edible horticulture (+4% to €230m)

Overall, the value of food and beverage exports has grown by 45% since 2009. Beverage exports for 2014 increased by 1% to €1.21billion in 2014. The craft Beer sector is also expanding. There are currently 33 microbreweries in Ireland and another 17 at development stage. Expansion of the whiskey industry continued during 2014 with new distilleries in Tullamore, Carlow and Dublin

Only 6.2% of farmers are under 35 years of age and 51.5% are over 55 years. The average dairy farmer is around 50 years of age and over 80% are married. However the tide has turned, the Agri-food sector is seen to have a good future and many younger people have returned to farming from the construction and other sectors.

INTRODUCTION

NEW

GET THE INFO YOU NEED TO KNOW, ON THE GO!

You can now read Ireland’s leading agricultural magazine on your tablet

or smartphone. The Irish Farmers Monthly app is free to download from the App Store and Google Play store.

Download the FREE Irish Farmers Monthly

app today!

Now available for Apple and

Android devices

Featuring all of the news and analysis from the print edition of the publication, as well as added functionality in the form of interactive and video content and a keyword search, Irish Farmers Monthly provides you with regular updates on the dairy, beef, tillage and sheep sectors, as well as developments relating to agricultural machinery, technology, agri-business and much more.

www.irishfarmersmonthly.com

IFM_App_RDS-2015_A4.indd 1 30/10/2015 2:11 p.m.

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

The 2014 Teagasc National Farm Survey (NFS) recorded data on 895 farms. Average Family Farm Income (FFI) increased by 6% in 2014 to €26,974, mostly driven by declining input expenditure which had been high due to the fodder crisis in the previous two years.

While the value of farm output decreased in 2014, farmers benefited from very good weather conditions and production costs were down by 6%”.

There were approx.15,654 specialist dairy farms with an average family farm income (FFI) of €68,877 in 2014, a 9% increase on 2013. Average herd size was 70 cows.Although milk price declined slightly in 2014, dairy farms produced 5% more milk in 2014 relative to 2013 and the milk price was on average 3% lower. Dairy farms also benefitted from lower expenditure due to lower volumes of animal feedstuffs.

There were approx. 15,707 cattle rearing farms with an average FFI of €10,271 in 2014. Suckler cow production is the dominant enterprise on these farms. Average herd size is 27 cows.

Income on cattle rearing farms increased by 8% benefiting from reduced animal feed expenditure and increasing prices for young animals.

There were approx. 25,674 cattle other farms, with an average FFI of €13,834 in 2014.Cattle fattening is the dominant enterprise on these farm

However, the average income on cattle other farms declined by 12% to €13,834, as the decline in input expenditure was insufficient to offset falling finished animal prices.

There were approx. 2,760 mixed livestock farms with an average FFI of €57,895 in 2014, a 14% increase on 2013. While most mixed livestock farms have a dairy enterprise, they are not specialised in dairy production and typically also have a substantial cattle enterprise

There were approx. 12,195 sheep farms with an average FFI of €14,551 in 2014, a 24% increase on 2013. While this seems like a substantial increase it follows a particularly poor year for sheep farmers in 2013.

There were approx. 6,651 tillage farms with an average FFI of €28,468 in 2014, a 1% decrease on 2013. The average gross margin per hectare on tillage farms was €1,098 in 2014. This included a Single Farm Payment of €365.

The average farm subsidy payment in 2014 was €18,859, and accounted for 70% of farm income. On cattle and sheep farms subsidies comprised over 100% of income.

Just over half of all farm households have off farm income, with 29% of farmers working off-farm. The number of farm households with off-farm employment peaked in 2006 at 59% and declined to 49% in 2012. There has been a slight recovery in 2013 and 2014.

The prevalence of off-farm employment varies regionally. In the West and Midlands regions 44 and 35% of farmers respectively work off farm.

The €26,974 figure is the average income for approx. 80,000 farms which includes many part-time and small farm holdings. Income varies considerably by farm size and system with the average income on dairy farms almost €69,000 in 2014

This compared to an average of just over €10,000 on Cattle Rearing farms. Less than 20% of our farms earned an income of €50,000 or more, while 40% earned less than €10,000.

Strong lamb prices and production combined with reduced input costs increased the average income on sheep farms by 24% in 2014 to an average of €14,551. However the 24% increase in 2014 is still not sufficient to ensure a full recovery to the 2012 levels.

Good growing conditions led to increased cereal yields in 2014, however falling prices meant that average tillage farm incomes were similar at €28,468.

The average direct payment per farm was €18,859 comprising 70% of farm income in general and over 100% on cattle and sheep farms.

Record Food Exports for 2014 and for YTDBy the end of 2014, some 389 companies had signed up to origin Green, with 80 companies, representing 75% of Irish exports

The total number of cattle slaughtered at Department of Agriculture, Food & the Marine approved meat plants in 2014 amounted to over 1.6 million head, an increase of around 150,000 or 10.3% on the 2013 figure. The number of steers slaughtered in 2014 increased by approx. 85,000 to over 611,000 animals and the number of heifers slaughtered increased by about 56,000 to exceed 430,000 animals.

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

Young bull and cow slaughtering stayed at a relatively similar position to 2013 with around 188,000 and 365,000 animals processed respectively. Bull slaughtering increased by almost 9,000 compared to 2013, reaching just over 43,000

Increased Beef & Cattle ExportsBeef exports excluding offal in 2014 were estimated at 530,000 tonnes and were valued at €2.1 billion, an increase of 12% on the 2013 figure. At 272,000 tonnes, beef going to Britain represented 51% of total Irish beef exports. Exports to continental Europe were at 243,000 tonnes. Shipments of Irish beef to non-eu markets amounted to about 9,000 tonnes, up 12% on 2013.

Live exports saw a 13% increase at 236,000 head. Calf exports were particularly strong to the Netherlands and Belgium which accounted for over half of calves exported. The calf trade to Spain was also noteworthy with over 44,000 head exported there.

The finished/store trade to the Britain picked back up from approx. 11,000 to over 18,000. The Libyan and Moroccan markets continued, with non-eu shipments amounting to 22,000 head for the year. With increased capacity vessels now approved opportunities for the live export trade have improved.

There were also a range of financial supports in place for suckler beef farmers in 2014/5. The Beef Data programme (BDP) is enhancing the genetic quality of the herd. This scheme was supplemented in 2014 by a new Beef Genomics scheme (BGS) which supports collecting genetic samples for laboratory testing. Almost €9.6 million was paid to over 26,500 applicants in the BDP in 2014 and €20 million for 31,000 farmers in the BGS in 2014

For 2015 the beef sector continued to improve with steer prices up by 9% year on year. Tighter supplies are also helping the demand from the factories and the weakness of the Euro is also a big help in British one of our main markets. On average, calf and weanling prices in 2015 are well ahead of last year which is good news for the suckler farmers.

2014 proved to be another steady year for the sheep sector. The average factory price for the year (excluding VAT) was €4.76 /kg which represents an increase of 3.47% on the previous year. Margins for 2015 have continued to improve as sheep prices are up 2.7% for year to date. Supplies are tight and slaughtering’s are about 1% down on the previous year.

According to Bord Bia supplies at sheep export meat plants for the week ending October10th stood at over

58,000 head which was 20% down on the corresponding week in 2014. Cumulative supplies for the year to date are on a par with year previous levels at just over 2 million head. Cumulative supplies of spring lamb are up 7% on 2014 while ewes and rams are back 14% for year to date.

The Food Harvest 2020 envisages a 20% increase in value terms of the sector. In committing funding of €3m to the programme in 2015 the Government is acknowledging the success of the scheme in 2014 in which 4,000 producers participated.

Not On the Pigs BackThe Irish pig sector experienced another difficult year in 2014. High feed costs, albeit at a lower level than 2013, together with ongoing challenges for other costs, combined to keep margins under pressure. The total number of pigs in Ireland in June 2015 was estimated at 1.5m, according to the Central Statistics Office (CSO) figures.

This number of pigs represents a decrease of 1.2% since June 2014, the CSO said. The number of breeding pigs was down 1.6%, while non-breeding pig numbers were down by 1.1% in the same period, the figures show.

A comparison of the June 2014 and June 2015 figures shows that in the breeding category the number of sows in pig increased by 3.2%.

Throughput at export-approved plants totaled just over 2.97 million, an increase of approximately 5% compared to 2013. Prices dropped by an average of 4% during the year offsetting this volume increase with the result that output values grew by almost 3%.

Export volumes increased by almost 7%, and values increased by 3% to an estimated €570 million. Trade to our largest single market, Britain remained stable. There was a continuation in the shift in exports to International Markets notwithstanding the ban on exports to Russia, leading to a 10% increase in trade to these markets.

Market access for pig meat was secured in the Philippines and Vietnam. China, Japan and south Korea now account for approx. two thirds of this growing trade. However the domestic market remains the primary outlet for Irish pig meat. More recent Bord Bia figures indicate that our exports are up 14% for the January to June 2015.

According to the IFA the average quoted price for pigs at €1.39/kg incl. VAT in Sept was 12% behind on a year

to year basis. In the meantime producer costs have only declined by 5c/kg so farmers have being receiving

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

negative margins in recent months. Since then matters have got worse as pig meat processors have dropped prices in October by 4c/kg.

The reasons for these poor prices include the Russian ban on EU imports and increased pig meat production in the EU (+5 %) On a more positive note a recent census of EU pig numbers showed that the sow herd was down by1% or 77,000 sows. Irish imports of pig meat have also reduced by 11% from 52,500 tonnes to 46,700 tonnes for the same period year on year. Pig meat consumption in Ireland is also increasing.

Poultry Industry SurvivingThe poultry sector continued to face considerable challenges during 2014. These included increased feed costs and significant pressure from imports. Export values also grew and reached an estimated €310 million in 2014.

At the end of 2014 there were 220 hen egg units registered with this Department, a slight increase on the 2013 figure. These consisted of 153 Free Range Hen egg units accounting for 35% of total hen places and 37 enriched caged Hen units accounting for 62% of total hen places. The remainder are organic egg and Barn egg units.

2014 saw the steady progression of the recent development in the Irish egg industry, with increased market access for hen eggs into third countries such as the United Arab Emirates

In Ireland, consumption of poultry meat accounts for a third of total meat consumption or almost 26kg per capita per annum, Ireland represents one of the highest levels of consumption across Europe.

Since last year, egg sales have increased by approx. 6% to €98 million in 2014, while the value of chicken sales has risen by 9% to €200 million in the same period.

Ireland exported 98,000 tonnes in product weight of poultry meat to 39 markets in 2013. Chicken accounts for 56% of the value of exports, with duck accounting for 26% and turkey accounting for the remainder. The British market accounts for 70% of shipments while other key markets include France and the Netherlands. For the first six months of 2014, exports were 11% higher on 2013.

Tougher Times for Milk ProducersThe average milk price paid to producers in 2014 was 37 cent per litre (Inc. VAT), compared to the 2013 average of

38 cent/litre. Milk production in Ireland in the 2014/2105 quota year was running over quota due to the high price so a super levy of around €69m was incurred.

However the Minister for Agriculture, Food and the Marine, introduced an instalment scheme for dairy farmers, to facilitate staggered payments of the 2015 super levy bill over the next three years thereby helping to ease cash flow problems on some dairy farms.

Milk prices have fallen dramatically during the second half of 2015 and for Sept they ranged from 28.9c/L at Carbery which held its milk price while Dairygold has also held its September milk price, at 25.50c/L.

At these prices high cost milk producers are losing money and certainly in Northern Ireland where prices are much lower.

Glanbia will pay its member suppliers 25c/L including VAT for September milk – farmers with no shares will receive 24c/L. This price is inclusive of a 1c/L Glanbia Co-Operative Society support payment to its members.

Due to the strength of sterling it is estimated that farmers in Britain and Northern Ireland are at a disadvantage of 6p/litre on milk prices compared to those in the Eurozone. Most farmers in the North operate a high input system which is relatively expensive compared to the grassland based spring calving system in the Republic. It is costing from 25 to 30 pence per litre to produce milk in Northern Ireland and prices are as low as 19 pence per litre.

AIB Bank reckon that the average price in the ROI for this season will be 28-29 cpl (cents per litre) which is 10 cents lower than the previous year. They also estimate that the European commodity prices for dairy products are only delivering a base price of c.23 cpl so the Coops and PLC’s have been supporting the farm gate price. According to Teagasc average dairy farmer incomes are expected to be down by 40% this year.

However the consensus is that maybe prices have bottomed out and will increase in the summer of 2016 when world demand has improved. Cow slaughtering’s are expected to accelerate in 2015 particularly in the high cost milk producing areas such as Belgium and Britain.

Milk deliveries in the EU for 2015 are expected to be up by 1% and could still increase further in 2016. The increase this year could be around 100,000 tonnes and come mainly from Britain, Denmark, Ireland, Holland, Poland and Spain.

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

According to Rabobank there could be 2.5 billion litres less milk traded over the next 12 months .This equates to a 5% decline in the world surplus largely driven by a fall in production in New Zealand and the USA.

Exports of Irish dairy products and ingredients were valued at €3.025 billion in 2014. This represented a 5.7% increase on 2013 as the Irish dairy sector had a strong performance on thriving international markets.

The targeted 50% increase in the Harvest 2020 plan involves an increase in milk production from 5bn litres in 2008/2009 to 7.5bn litres in 2020. Based on recent CSO figures show that we produced 5,652 million litres of milk in 2014 so we are over 25% of the way to achieving the target even before quotas were abolished.

Agri Education Delivers the GoodsQuality education is critical to the sustainability of the agricultural and food industry and we have a wonderful range of agricultural and horticultural courses on offer at six agricultural colleges, eight Institutes of Technology and at UCD.

Close on 2,000 learners have enrolled in agricultural college further education programmes and Teagasc linked higher education programmes for the 2014/15 academic year.

Teagasc has received almost 1,500 applications for its Green Cert courses. This is about three times the normal level of applications.

On an annual basis over 3,500 learners participate in Teagasc further education programmes. In addition Teagasc provides customised short courses to 5000 or so adult farmers and agri-industry personnel annually.

Some 600 recent entrants to dairying participated in a Teagasc programme in 2014. The Dept. of Agriculture also supported a new Teagasc/Farm Relief services run Milking skills, course which had 350 participants in 2014.

Good Crops of Cereals but Disappointing PricesThe 2014 cereals harvest was estimated at 2.56 million tonnes, 7% or 218,000/t higher than the 2013 harvest and well above the average two million tonnes, this despite the national cereal area falling by 1%. This is the highest cereal production figure since 1985 and a reflection of the recent trend of the increasing proportion of winter cereals being grown.

The overall area sown to cereals in 2014 was in the region of 302,000 hectares similar to the previous year however the trend has been to a more winter crops. Total production of wheat was 706,000 tonnes, up 32% on 2013 with yields for winter wheat significantly higher; barley production was 1,711 million tonnes up 5%, while production of oats decreased by 22% to 146,000 tonnes.

National cereal yields were well above the five-year trend figures for the second year in a row. Winter barley yields retreated 2% on last year’s record highs to 9.3 t/h. Winter wheat yields increased to 10.2 t/ha with yields unchanged at 8.0 t/ha for spring wheat. Winter and spring oat yields both increased on 2013 to 8.6 t/ha and 7.3 t/ha respectively, the figure for winter oats being the highest ever recorded.

A favourable grain fill period and fine weather during the harvest all contributed to high yields and ensured that grain quality was excellent. Preliminary estimates for the CSO census in June 2015 show that the area under cereals decreased by 15,700 hectares (-5.1%) to 291,000 ha. This was due to a decrease of 23,200 ha (-14.9%) in spring barley and a decrease of 10,200 ha (-15.6%) in winter wheat.

Good Times for HorticultureFavourable overall weather conditions meant 2014 was a reasonably good year for most sectors within the horticultural industry. In 2014 the output value for the horticulture sector, excluding potatoes, was estimated at €336m.

The value of output from the mushroom sector increased significantly in 2014 continuing the trend for recent years. The increase in value was largely attributable to an increased demand from our main export market in Britain.

During 2014 grant aid of €3.98M facilitated capital investment by growers of approx. €10m in specialist buildings and equipment.

Product 2013 2014 % change

Mushrooms € 121.5 m €133.2 m +9.6

Field Vegetables €59.7 m € 61.1 m +2.2

Protected crops €82.0 m € 85.3 m +4.1

Outdoor Fruit Crops €7.7 m € 9.8 m +26.9

Bulbs, Flowers & Foliage €4.5m € 5.9 m +30.3

Nursery Crops etc. €38.2 m € 40.8 m +6.9

Total € 313.6 m € 336.1m +7.2

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

Horse & Greyhound IndustryIt is estimated (in a study undertaken by Alan Dukes for the ITBA in October 2013) that the Irish bloodstock industry provides 14,000 jobs and generates €1.1bn in economic output. Bord na gCon estimates that the greyhound industry sustains in excess of 10,000 full and part-time jobs directly and indirectly, many in rural communities, and injects an estimated €500m into local economies.

Agri EnvironmentREPS participants are located in counties along the western seaboard, with 19% located in counties Galway and Mayo. There were just under 17,000 farmers participating and due a payment in REPS4 up to the end of 2014. In 2014, €139.5m was paid under the scheme with the average payment amounting to €5,700. REPS also help to preserve the built heritage in rural Ireland in the traditional Farm Buildings Scheme by ensuring that a number of buildings of historical and architectural value are maintained into the future.

After a big increase in fertiliser and limestone use (tonnes) in 2013 compared to previous years, there was a significant decrease in sales in 2014, although NPK use was still 5% above the ten year average. The main decrease was in nitrogen sales (6.2%), with a lower decrease in phosphorous application (3.9%) and a slight increase in potassium sales (1%).

Year Nitrogen Phosphate Potash

2013 353,044 36,986 92,790

2014 331,782 35,584 93,812

10 year mean 329,208 31,296 81,599

Growing Prospects for ForestryForests cover 10.5% of the land area of the country. This is one of the lowest levels in Europe, as the eu-27 average is about 33%. Forest cover here has increased by nearly 300,000 hectares since 1990. Government schemes have led to the establishment of some 26,000 private forest plantations since 1980, the majority of which are owned by farmers.

Forestry activity enhances the rural environment and provides employment in areas where there are alternatives while visits to forests generate an estimated €268 million annually in local communities. Forestry has an important role in relation to climate change, construction, bio-energy, bio-diversity and its potential to deliver long-term employment in other downstream industries.

It is estimated that the total potential demand for energy wood will be c. 1.7 million cubic metres by 2020. Actual demand will depend largely on the level of co-firing of wood biomass for electricity generation, installed biomass-based heating and CHP capacity and the impact of any new measures aimed at stimulating the increased use of energy wood.

A growing international trade in wood fuels is also likely to impact on demand for locally produced fuels. On the supply side, a COFORD report estimates that up to 1.5 million cubic metres of forest-based biomass could potentially be available for the renewable energy sector by 2020, increasing to 1.8 million cubic metres by 2027. The bulk of this material is likely to come from privately-owned farm forests.

While showing a steady growth over the past number of years, there was a sharp decline in the area under organic production in 2014 as a number of participants completed their Organic Farming Scheme. The land area under organic production methods by 1,587 farmers equated to just less than 1.2 % of agricultural land. The Irish organic retail market was estimated to be worth approx. €100 million in 2014.

Fish Industry Doing WellThe Irish seafood industry includes the sea fishing, the aquaculture and the seafood processing industry.

The sector generated sales of €850 million in 2014 and provided approx. 11,000 jobs in coastal regions. Almost 60% of the employment and added value created in the marine sector is located outside the most developed regions making this sector hugely important to maintaining rural coastal communities.

Irish seafood exports were valued at €520 million in 2014. This represents a 6% increase on 2013. In volume terms, exports at 260,784 tonnes are showing a 2% increase on the previous year. Trends in the main seafood categories in 2014 were as follows: Salmon at €46 million is showing an 11% increase on 2013.

A corresponding 21% increase in volume suggests the beginning of a recovery in the supply of salmon expected throughout 2015. The unit price of fresh whole Irish salmon at €6.6 per Kg is well above the average EU market price in 2014 and reflects the market position of organic salmon. Pelagic trade was valued at €219 million and amounted to 184,157 tonnes in 2014.

This represents a 20% increase in value from €183 million with a corresponding 7% increase in volume on 2013.

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

Trade in mackerel doubled to €111 million while tuna exports increased to €22 million. There was a decline in trade in the other main pelagic species namely herring €17 million (-26%), horse mackerel €41 million (-21%) and blue whiting €16 million (-26%).

Whitefish exports were valued at €50 million in 2014 a decline of 4% on 2013 due largely to restricted fishing caused by stormy weather early in 2014. Shellfish exports valued at €172 million were down 2% on 2013. Exports of Dublin Bay Prawns increased by 30% to €42 million, exports of mussels declined by 37% to €13 million due to low harvest volumes and bay closures in the rope mussel industry while crab exports, at €34 million, were on a par with 2013.

The market for Irish oysters was positive in 2014 with exports at €25 million. Exports of whelk grew to €16 million. Exports of fish meal and oil were down 36% to €20 million in 2014. Sales on the domestic market in 2014 were valued at €330 million.

Food Harvest 2020 identifies the potential of the seafood industry to increase employment from the present level of 11,000 to 14,000 jobs by 2020, mostly in peripheral coastal communities. It also identifies the potential to increase turnover in the sector to €1 billion by 2020.

Importance Of EU Schemes To Farm IncomesAnnual expenditure of almost €1.6 billion, on the single payment, Disadvantaged Areas and Rural environment protection and Agri-environment options schemes, was made by this Dept. of Agriculture. Over €1,166 billion was paid to over 121,000 farmers under the 2014 single payment scheme.

The Department’s change management programme has been the key enabler in reducing its running costs by €91 million since 2008, a reduction of 30%; staffing levels have fallen by c. 1,600 or 33% since 2005; and, their local office network has been reduced from 58 offices in 2009 to 16 currently. combined with the increased use of digital services and processes, changes in the Department’s various schemes and reductions in disease levels has led to improved business processes and greater operational efficiency.

The Department’s online services continue to expand; over 80,000 (or 61%) single payment scheme applications were submitted online in 2013, representing a cumulative ten-fold increase since the facility was made available. So the increased use of IT has been very beneficial to both farmers & Dept. personnel.

The Department launched a very successful Farm safety scheme in 2014 with a budget of €12.2 million, with over 6,300 applications received. This scheme provides financial support in a very practical way to farmers addressing safety issues on their farms. Supports include the provision of safety fencing around slurry stores, the construction of external agitation points, replacement of damaged slats, and improving electrical installation and lighting on farms.

A text message service to keep farmers informed on important issues and deadlines was introduced in 2012 to improve customer service. It includes notifications regarding scheme reminders such as SPS closing dates, payment updates, farm safety, animal health, as well as alerts of new information on the Departments’ website. At the end of 2014 more than 100,000 farmers registered their mobile numbers for communications with the Department.

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

Record Livestock Numbers Preliminary estimates for June 2015 show that the total number of sheep was 5,164,000, an increase of 1.3% on June 2014.The number of non-breeding sheep was up 3.9%, while breeding sheep numbers were down by 1.1% in the same period.

The June 2015 results also show that:

• Cattle numbers were up by 37,400 (+0.5%) to 6,963,500.

• The total number of cattle under 1 year increased by 163,900 (+8.7%), while cattle 2 years and over decreased by 76,200 (-8.6%).

• The number of dairy cows was up by 69,400 (+5.7%), while beef cows dropped by 53,200 (-4.7%)

Based on a discussion group model in which farmers engage in peer-to-peer learning, the Beef Technology Adoption Programme (BTAP) has approx. 6,500 participants in 414 groups.

During 2015 grass growth and weather conditions have been good so most livestock have had access to adequate grazing and have been able to conserve adequate quantities of silage.

The Bord Bia Beef and Lamb Quality Assurance Scheme (BLQAS) significantly expanded its membership during 2014/15. The numbers who are part of Bord Bia’s beef, lamb and dairy quality assurance schemes have risen as follows.

• Certified beef producers: 44,351.

• Certified lamb producers: 12,023.

• Certified dairy producers: 7,252.

Excellent Prospects for Malting BarleyUp to 500 farmers supply Boortmalt, who in turn have massive contracts with companies like Diageo and Irish Distillers, who in turn produce global brands such as Guinness and Jameson whiskey.

The whiskey boom has sparked a €400m investment rush into whiskey distilleries around the country. The big four are Jameson, Bushmills, Powers and Tullamore Dew, but it’s likely that there will be up to 15 other whiskey distilleries operational here within the next three years.

While an estimated 60,000 tonnes of Irish barley are used in whiskey-making, the Scots use 620,000 tonnes. It is predicted that the domestic barley demand will be double its current level by 2020.

In 2014, Boortmalt contracted about 50,000 acres for malting barley production. The intention now is to increase this to 65,000-68,000 acres to produce more than 143,000t of barley for malting. Over 300 tonnes of barley is used daily to make Guinness. In total, the drinks industry spends €400 million on raw materials from farms across Ireland every year, supporting 5,000 farming families.

2014 was a hugely significant year for Guinness production, as they opened Brewhouse No. 4 that will use approx.13% of Ireland’s total annual domestic production of barley. Brewhouse No. 4 produces 300,000 pints per brew every two hours, allowing for a substantial boost in exports.

Farms represented in the NFS were as follows:

Specialist Dairy Farms 15,654

Cattle Rearing Farms 15.707

Cattle Other Farms 25,674

Mainly Sheep Farms 12,195

Tillage Farms 6,651

Food Exports Summary

Sector 2013 - €M 2014 (e) - €M % change

Beef 2,248 2,270 +1

Sheep meat 216 218 +1

Live animals 245 244 0

Pigmeat 552 570 +20

Poultry 259 310 +4

Dairy products & Ingredients 2,968 3,055 +3

Prepared Foods 1,669 1,805 +8

Beverages 1,197 1,205 +1

Seafood 496 540 +4

Horticulture & Cereals 222 230 -1

Total Food & Drinks 10,072 10,448 +4%

Feed Compound Trade to Increase VolumesWith the abolition of milk quotas and increased livestock numbers the feed trade can look forward to selling more animal feed to farms on the island of Ireland. Currently there are at least 40 major suppliers on the market and it has become an increasingly competitive business particularly along the border counties. The feed compound trade is of course the major market for home

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REVIEW OF THE AGRI-FOOD INDUSTRY IN 2014/5

grown cereals and it is interesting that the pig and poultry sector account for over 25% of the sales.(see table)

12 Months ended 31 December 2014 ( Jan - Dec Cum)Species 2013 2014 Difference %

CATTLE

Compound 1,755,370 1,519,207 236,163 -13.5

Coarse 990,974 808,481 182,493 -18.4

CattleTotal 2,746,344 2,327,688 418,656 -15.2

Pigs 690,767 696,206 5,439 0.8

Poultry 493,481 520,974 27,493 5.6

SHEEP

Compound 132,590 105,038 27,552 -20.8

Coarse 58,139 51,319 6,820 -11.7

Sheep Total 190,729 156,357 34,372 -18.0

Subtotal 4,121,321 3,701,225 420,096 -10.2

Horse 91,351 89,532 1,819 -2.0

Oils & Molasses 201,316 163,293 38,023 -18.9

Other 211,665 174,610 37,055 -17.5

Grand Total 4,625,653 4,128,660 496,993 -10.7

Farm Machinery Update 2015

Tractor sales this year are well back on the previous year. Sept ytd sales of new tractors are down by 8.3% and used tractors are down by a whopping 15.7% so reduced milk prices are taking their toll on farm machinery purchases.

There were 1,512 new tractors registered in the Republic of Ireland to the end of July this year, with Co Cork dominating the market with 202 new tractors, followed closely by Tipperary and Wexford as the top three counties for new tractor registrations so far this year.

However what is more significant is that the average horsepower keeps on rising. The main customers are tillage farmers & agri contractors.

However large dairy farmers when they have had a good financial year due to high milk prices can write off tax against new machinery so their purchases could be significant when milk prices are good as in 2014.

New tractor purchases from the tillage sector are likely to be depressed as a result of what many are labelling as an income crisis that has developed over the last three years in the sector as a result of low grain prices and escalating inputs costs, particularly for fertiliser.

The weakening of the euro against Sterling is helping to boost Irish farm machinery sales to agri contractors this year. Sales of grassland equipment in Ireland, particularly forage harvesters, is up on 2014 levels.

The numbers of used tractors imported into the country has slumped this year, according to latest statistics from the Central Statistics Office.

Since January, the number of tractors imported for the first nine months of the year is down 34%.

Comparing the September figures to those of 2013 shows a staggering fall off imports of tractors, down over 70% from a high of over 4,000 to just over 1,200.

The massive fall in imports is as a result in the weakness of the euro against Sterling this year. The euro has fallen over 10% between September 2014 to September 2015.

On a more positive note total Irish forage harvester sales this year may well come in at around 70 units, up from 50 in 2014. This market is now contractor driven.

Last year, Irish milk producers enjoyed a sustained period of strong prices, with the result that contractors were paid with little delay. On the back of these good cash flows, contractors have had the confidence to invest in new farm machinery during 2015.

Last year saw 69 used combines imported into the market, while the figures for the first six months show that just 18 have been registered. The annual market is estimated to be 35 pa and the market leaders in order of importance are Claas, New Holland & John Deere.

The top three tractor brands are John Deere followed by New Holland and Massey Ferguson who are neck on neck. A Significant number of tractors are now hired out to Agri contractors and farmers by major dealers such as Shaw and Templetouhy Farm Machinery. One reason for farmer hire is that they cannot afford to buy high HP tractors and may only require them in the winter time to operate mixer wagons or for short periods at other times during the season e.g. for silage making etc.

The breakdown by HP for 2015 was as follows:

Horsepower No. of Tractors Sold

Under 120 385

101 to 120 834

121 to 150 376

151 to 200 295

201 to 250 50

251 + 10

Total 1950

Compiled by De Paor Consultancy on behalf of Irish Farmers Monthly