Farm commodities are getting better prices now, but unprecedented increases in the cost of inputs are wiping out profits, according to CSO figures.
Prices paid to farmers are up nearly 30%, but the hike in input costs is running at 40%.
IFA Farm Business Chair Rose Mary McDonagh said. “It’s simply just not sustainable at current levels, and the fear is where costs will go in the months ahead with all the volatility on international markets, from multiple perspectives.”
“Farmers cannot be expected to carry on regardless. Many operations will simply go out of business if targeted measures aren’t introduced. Unlike others, farmers haven’t the luxury of being able to pass on the added cost of production to others, and so cannot be left to carry all the risk,” she said.
Aggregate agricultural output prices rose 1.7% in June 2022 vs May 2022 levels, with a welcome uplift in pig prices (+8.1%) the main driver. On an annual basis, aggregate output prices were up +29.8% in June 2022 vs June 2021, with positive gains reported across all sectors: cereals (+34%); beef (+27%); pigs (+8.2%); sheep (+12%); poultry (+7%) and milk (+44.7%).
However, the benefit of increased output prices has been superseded by the phenomenal rise in agricultural input prices – up 40.2% year-on-year. This means any farm gate price increases are completely eroded, and more with it. Although they are showing some signs of easing, they are a long-way off “normal levels”.
The largest annual price increases were in select fertilisers (+181.6%) and feedstuffs (+45.6%), with motor fuel (+10.2%) recording the largest monthly increase.