Genfitt Knowledge Report 2021- The State of the Agricultural Market 2021

Nov 23 2021

Genfitt Knowledge Report-The State of the Agricultural Market 2021

By: Aoife Gallagher
Date: 23^rd November 2021

The sixth edition of the annual Genfitt Knowledge Report was released just over three weeks ago, to understand the performance trends in the Irish agricultural sector. Once again this year the research for this report was carried out remotely as a result of the ongoing pandemic. All research was conducted via online surveys, telephone interviews and zoom groups.

Expert market analysis in this year’s report concluded that the market has gone from strength to strength since the Pandemic began. 2020 was a difficult year for many sectors, but as our food provider, farming will always be key. The industry was quick to adapt to a situation which was unkind to many industries.

54% of respondents rated the market 7 or 8, so a very positive year for most of our sector-Genfitt Knowledge Report 2021

In this year’s report, we have seen the highest scores in the history of the Genfitt Knowledge Report. Respondents were asked to rate how the market has been this year. Results showed that respondents rated the Agri marketplace a strong 8.5 out of 10 in 2021. Looking at last year’s predictions, the marketplace was significantly better than many thought it would be this year. The Genfitt Knowledge Report 2021 explains the many reasons which will result in 2021 being a good year for the industry.

Manufacturing

So far this year, farm incomes have improved. According to Teagasc’s Mid-Year Outlook for 2021, farm incomes have increased across all systems with dairy forecast to set a new annual record in excess of €85,000. As a result, farmers are in a good position to buy machinery, mainly tractors. However, there have been major supply issues meaning new machines are not arriving quickly enough to fulfil demand. This is mainly as a result of Covid-19 with suppliers unsure about ordering quantities. Other complications as a result of Covid are the increased price of raw materials and shipping containers.

Genfitt Knowledge Report 2021, Page 9

Meanwhile, the second-hand market has been adversely impacted by Brexit. Dealers are unable to meet the demand and issues around importing tractors from the UK has made it extremely difficult. As a result, farmers are more inclined to buy new tractors.

Suppliers didn’t put in big enough orders, which is causing issues as they can’t get the goods and there’s a squeeze on components too.

Agri Retail

Agri retail remained strong in 2021 as stores had to remain open throughout Covid to cater for this demanding and essential sector. Since all shops reopened in May, business in Agri retail stores has not slowed down. People have more disposable income and fortunately it’s finding its way to Agri stores.

There is no evidence of a slow down on the horizon, so retail is going from strength to strength.

Dairy

Dairy is in a strong place, with milk prices broadly stable, albeit at high levels. Processed milk products such as milk powder, casein, yoghurt, cheese and butter are also in high demand. However according to Teagasc’s Mid-Year Outlook for 2021, higher feed costs could decrease growth later in the year.

There continues to be evidence of farmers converting from beef and tillage to dairy farming. This is as a result of the attractive profit opportunities. Based on our interviews and discussions in this year’s Knowledge Report Expert Group, it is likely there could be 20% more dairy farmers in the market in comparison to 2020.

Beef

An incredibly tough marketplace, Irish beef continues be in demand despite the uncertainty around Brexit. Statistics suggest exports to the UK have increased in 2021 and any logistic issues have been resolved for the moment. Farmers are still heavily dependent on EU support as a result of Covid-19, but farmer’s incomes are expected to rise by the end of 2021. With the legalities of Brexit still in the air, this improvement may not sustain in 2022. According to Teagasc’s Mid-Year Outlook for 2021, beef production is forecast to end the year 2021 4% lower than 2020.

Irish beef continues to be in demand and beef farmers are having a better year.

Tillage

2021 was a year of good weather. Temperatures remained above average into September which gave farmers more time on the farm. Yields have been high, moisture content has been low and prices are better than in recent years. Farmers have increased the area sown to a range of crops for 2021. The Farmers Journal states that “The area sown to cereals and other agricultural and field horticulture crops has increased by 1.9% in 2021.”

2021 saw perfect farming weather.