Bank of Ireland Agri Pulse indicates positive sentiment despite Brexit fears

Two in five Irish farmers expect output to increase over the next 12 months

  • One third of farmers plan on increasing investment in the farm in the coming year
  • Half of farming businesses are on a growth trajectory
  • Two thirds think Brexit will have a negative impact on their business in the next 12 months

Two in three farmers expect Brexit will have a negative impact on their business in the next 12 months. However one in three (33%) are planning to increase investment in the farm over the coming year and half (55%) have ambitions to expand over the medium term. This is according to research conducted for Bank of Ireland’s ‘Agri Pulse’, which is part of the Bank of Ireland Economic Pulse series. The research surveyed farmers on a range of topics including farm output, input costs, market prices, investment plans and business ambitions.

Despite concerns around Brexit, the Agri Pulse points to more positive sentiment among farmers compared to April when the survey was last carried out.

Commenting on the findings, Dr. Loretta O’Sullivan, Group Chief Economist, Bank of Ireland said, “While Brexit is a cloud on the horizon, improving farm profitability has helped brighten the mood. 39% indicated that the financial position of their farm is better now than a year ago, which is up from 24% in the April survey and 11% last August. The results also point to some easing in input cost pressures and a better outlook for market prices, which bodes well for further improvements in profitability. Still, one in three main farmers is involved in outside activities to supplement the family farm income.”

With regard to production, she noted that two in five (39%) farmers expect to increase output over the next 12 months, with 52% intending to produce the same amount. Factors identified as having an impact on production include land shortages, cash flow and price volatility. These were common to most sectors, while labour shortages appear to be an issue for dairy and sheep farmers in particular.

Discussing Brexit, Dr. O’Sullivan said, “Pricing and uncertainty are key concerns, which the renewed weakness of the pound over the summer and the lack of progress in the latest round of withdrawal negotiations will do little to alleviate. Although Brexit is clearly a headwind, it is encouraging to see that half of farmers are looking to expand their business in the next one to three years.”

The results also show that 32% would prefer the farm to remain the same size in the years to come, while just 14% (mainly older farmers) are planning on scaling down.

“Farming remains important for rural communities and local economies throughout the country. The Agri Pulse provides an insight into what is happening in the sector, the issues and the trends,” concluded Dr O’Sullivan.

250 farmers were interviewed as part of the Agri Pulse, with the fieldwork for the surveys undertaken by Ipsos MRBI on behalf of Bank of Ireland. Dairy, cattle (suckler cow and other), tillage, sheep and other farming activities are covered. The Agri Pulse is part of Bank of Ireland’s Economic Pulse research which surveys over 2000 businesses and 1000 households each month.

Bank of Ireland has a long association with the National Ploughing Championships and is an associate sponsor of this year’s event. The Bank of Ireland stand is located beside the National Ploughing Association marquee in the centre of the site – Block 2, Row 11, Stand 267. Bank of Ireland has a number of themed information areas at its stand this year and is also hosting a panel discussion titled ‘Dairy, Beef & Brexit’ where an expert panel of special guests will discuss the outlook for the Dairy and Beef markets.