Input prices hitting farmers hard
The UFU (Ulster Farmers’ Union) has stated that soaring input prices are hitting sheep and beef farmers “hard”.
According to the organisation, CAN fertiliser has increased from approximately £200/t in spring 2021 to £900/ton in spring 2022, which is an increase of £700/ton (350%).
Meanwhile, beef finishing rations are up £230/t in spring 2021 to £310 in spring 2022 – an increase of £80/ton (34.8%).
On the other hand, breeding sheep rations have jumped from £240/t in spring 2021 to £340/t this spring, which equates to an increase of £100/t or 41.6%.
Finally, red diesel has increased from £0.56/L in spring 2021 to £1.10/L in spring 2022. This is an increase of £0.54/L (96.4%).
UFU beef and lamb chair, Pat McKay, said beef and sheep farmers are “extremely on edge about the way things are going”. He highlighted that crippling production costs are reaching levels they have never seen before.
In his view, it is “completely unsustainable”. “Everyone is uptight about whether or not they’ll still be in business by the end of the season. Farm families are under immense pressure.”
“It’s not only the cost of fertiliser and ruminant feed, which apparently is going to take another jump soon; other inputs such as lime, bale plastic, grass seed and minerals have increased recently too.”
“Beef and sheep farmers are getting it from all angles, and it’s severely impacting their profit margins.”
“What we need is for the market to provide a stronger beef and lamb price if our farmers are to have any chance of keeping their head above water,” said Mr McKay.
Beef and sheep prices
While beef gained a positive uplift recently, he said this is minor compared to the production costs farmers are enduring.
Meanwhile, he reported that prices for lighter and plainer types of store cattle and drop calves are decreasing. On the sheep farming front, he estimates that spring lamb quotes are back 50-70p/kg on last year.
He said calculations show that the expense of producing lamb was more than the return.
“It has been an extremely uncertain spring to date, and it is impacting the confidence of our primary suckler and dairy beef calf rearers. They need certainty to plan for the future.”
“The only way to sustain our world-leading beef and sheep sectors is for the rest of the supply chain to show their support for farmers.”
“We need our retailers, wholesale suppliers and processors to share some of the increased costs, helping us to get through this very difficult period. Farmers cannot absorb all the expense alone, nor should they have to as primary producers.”
According to UFU hill farming chair, Nigel McLaughlin, the war in Ukraine has led to a “sharper and more widespread” increase in farm input prices in 2022 than some had anticipated at the end of 2021.
“For upland and hill sheep producers, it remains to be seen as to what extent the increase of output prices will compensate for the rise in production costs.”
“Spring is a very costly time of year for livestock farmers. In the Republic of Ireland, the average family farm income on sheep farms is forecast to decline by 20% this year which is very worrying.”
To help farmers manage their financial situation, CAFRE has designed a ‘what if’ calculator to show the impact increasing input costs would have on resulting margins.
The body has urged farmers, with a CAFRE advisor, to contact them about this tool to help with management decisions for the months ahead.
The UFU confirmed that lobbying is continuing with processors, retailers, government officials, local politicians and industry to try to alleviate the pressure on farm families as the need for extra costs to filter up the supply chain “intensifies”.