Farmers in clover after stellar year for incomes - but inflation pushes up price of Ulster fry
THE north's agricultural sector is in clover after a "stellar" last year in which total income from farming (TIFF) surged by 82 per cent in real terms from £254 million to £450 million.
The whopping regional increase, which significantly outperformed the UK as a whole, was mostly down to the weakness of the pound, and is double the average of the past 20 years after accounting for inflation.
And when subsidies are stripped out, there was still a rise of more than 50 per cent in the 2016/17 financial year, according to Ulster Bank's chief economist Richard Ramsey, who was addressing the bank's annual pre-Balmoral Show breakfast (it is the principal sponsor of the May 16-19 event for the 10th year running).
Figures from the Department of Agriculture, Environment and Rural Affairs also point to an expected 73 per cent increase in farm incomes in the 2017/18 financial year just ended.
“It is also a positive story when we look at gross output," Ramsey said.
"Overall, taking into account the various sub-sectors such as dairy, livestock and pigs, there was a 17 per cent increase from 2016 (double the rate of growth in input costs). This was driven in large part by the recovery in the dairy sector, which saw output rise by 46 per cent in monetary terms due to an increase in the price of milk.
“Northern Ireland's farming industry is dominated by the dairy sector, which makes up 32 per cent of gross output in the sector compared just 14 per cent for the UK as a whole, so the strong recovery in this part of the industry has a major effect on overall performance.”
But he cautioned that while the figures for the farming sector are positive, inflation remains one of the main challenges for consumers in 2018, evident in the rising price of food, which makes up a significant proportion of household spending.
And to illustrate the point, he presented the 'Ulster Fry Index', the bank's popular measure of food price inflation, which shows that the price of items making up a cooked breakfast have increased by 2.8 per cent in the last 12 months - the highest jump in five years.
Of the main items in an Ulster fry, bacon and sausages were among the biggest risers, both up 3.8 per cent. Butter was up 7.7 per cent while bread rose 3.9 per cent, but tomatoes, eggs and margarine all saw price falls in the past year.
"Those who eat healthier breakfasts will be pleased to hear that smashed avocado is 1.9 per cent cheaper than a year ago while lettuce is down 41 per cent," Ramsey added.
Ulster Bank senior agriculture manager Cormac McKervey said farmers in Northern Ireland are currently keen to borrow money to invest.
“As the fortunes of farmers have improved, particularly in the dairy sector, we are seeing significant demand for investment in land, free range egg units, dairy farm investment and pig finishing units," he told the breakfast.
"We are keen to support this demand and retain a strong appetite to lend to the agriculture sector. Ulster Bank's closer alignment with NatWest has brought significant benefits to us in terms of access to additional expertise and our appetite to lend to farmers is now even greater than before.”