Energy and fertiliser price rise likely to cause long-term issues for farmers, Teagasc says

High prices for energy and fertiliser driven by the war in Ukraine could cause "significant long-term issues" and reduce the health and welfare of beef and sheep farmers, the Government's food security committee was privately warned last month.

Teagasc, the agriculture and food development authority, also told the first meeting of the committee that substantial losses were accumulating in the pig and poultry sector – with average losses on pig farms at €56,000 per month, anticipated to rise to €71,000 per month.

The Teagasc presentation, which was released under freedom of information law, outlined a range of challenges facing the agricultural sector as input prices for items such as fertiliser, foodstocks and energy climbed.

It said that “increased stress levels” on farms were a risk among beef and sheep farmers, which would lead to “significant long-term issues” and “affects [which] will have impacts on whole families with poor decision-making outcomes as a result”. The crisis may cause unproductive cows to be culled early and sold before they are fully fattened due to high meal prices. This in turn risks “poorer quality carcasses that are penalised in the market” and lower profits per head of cattle, leaving the potential for lower margins on beef farms.

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The pig and poultry sector is seen as particularly exposed, with Teagasc telling the meeting that producers are encountering their highest ever losses, with energy costs up 80-100 per cent, and 20-30 per cent of pig units at risk of closure.

Meanwhile, pig farmers are finding it difficult to access credit, Teagasc told the committee, while others have an “unsustainable debt burden”. Feed ingredients had seen cost increases of a third between the start of January 2021 and March 2022, according to the presentation.

The slide deck was shown to the first meeting of the National Fodder and Food Security Committee on March 11th, after it was convened by Minister for Agriculture Charlie McConalogue in response to the costs crises unleashed and exacerbated by Russia’s invasion of Ukraine.

A similar presentation to a second meeting of the committee, on March 22nd, found that customers of feed mills, who had been advanced credit by their suppliers, were “rapidly approaching max credit limits”. It outlined how many farmers were finding it difficult to source fertiliser, with 87 per cent planning to spread less fertiliser on grazing ground as a result.

Imported grain

The first meeting of the committee heard that 60 per cent of grain used in Ireland is imported, and that 30 per cent of grain on the world market is sourced from Ukraine and Russia – with 20 per cent of Irish fertiliser coming from Russia. It outlined how farming organisations said the average cost of diesel had doubled on farms to €20,000 per month, and that they argued the removal of carbon tax and giving better access to State-backed funding would help alleviate higher fuel costs. The Irish Farmers Association president Tim Cullinan was among those to argue that "suspension of the carbon tax for both farmers and contractors should be looked at".

He also said there should be a review of “any regulations that inhibit food production”, and that there was an “opportunity for GM crops and technology currently restricted within the EU” to be reviewed.