A total of 33% of Irish machinery manufacturers saw business increase in 2023, 17% felt it was the same as last year, while the remaining 50% felt it was below/worse than business in 2022.

This is according to a report issued by Mayo-based Genfitt, a wholesale distributor of farm machinery parts and spares.

This is the eighth edition of the independently commissioned Knowledge Report, which seeks to understand the trends and factors affecting Ireland’s agricultural sector year on year.

Manufacturers’ survey

Labour availability, energy costs, poor commodity prices (milk, meat and crops) and credit/finance were the biggest factors that affected Irish machinery manufacturers in 2023.

Some manufacturers said that they felt the price of materials and the weather resulted in a lack of confidence in the sector this year.

Original equipment manufacturer (OEM) respondents, on the whole, seem to have had a fairly level 2023. In the main, costs were up and demand was down. As regards the future outlook, respondents cited uncertainty, rising costs and low commodity prices as a future worry. Some manufacturers said that dealers who are already well stocked will be cautious about the year ahead.

Overall, the report’s prediction is that 2024 will be worse than 2023, but that it will get better, seeing a recovery in 2025.

Overall, data and feedback from respondents suggests that there is confidence in the sector, as well as its ability to perform competitively at a global level.

Farmers’ perspective

A total of 3,648 farmers were surveyed. The vast majority, 76%, are farm owners/operators, with 52% full-time farming.

Beef farmers accounted for 43%, followed by 27% being dairy farmers.

A total of 48% reported their business was experiencing the same performance compared to last year, while 33% said performance was down compared to last year.

The majority, 60% of respondents, have spent or plan to spend under €10,000 on machinery.

Meanwhile, 30% responded in the €10,000 to €50,000 range, with 10% north of the €50,000 bracket. The report says farmers are cautious about committing to purchasing machinery in the current market conditions. The vast majority (77%) had made a purchase online for their farms.

The report notes that the Covid-19 lockdown contributed to this large cohort buying online.

Interestingly, 69% of farmer respondents cited online marts as the most popular technology they use. The three most negative concerns to farming this year were the weather, the cost of fertiliser and the cost of living.

The average respondent rated the future for the Irish farming sector in 2024 as five out of 10.

Agribusinesses

These respondents were agri-trading businesses, machinery dealers and hardware stores/motor factors.

The majority (82%) spent the same as, or more than in 2022 on goods and components, reflecting the positive score on the business performance they experienced.

In terms of business performance in 2023 v 2022, 43% stated that they had seen the same performance, while 35% said they had a better year in 2023.

Only 2% felt that this year was worse than 2022.

The top three factors affecting resellers’ business were cited as high input prices, labour costs and availability, followed by the Green Agenda. The average respondent rated the future for the Irish farming sector in 2024 as six out of 10.

Expert panel

The general sentiment from the expert group was a lack of marketplace confidence. High prices, combined with rising general business costs, have impacted on the readiness of people to spend.

The panel said a general sense of reluctance and, in some cases, a fear factor, was holding back investment until more certainty becomes apparent.

The panel found that the price of machinery has continued to increase in 2023, with demand going down as a result.

It said that machinery sales were also seen to be slowing due to the longer-term outlook.

The panel predicted a tough 12- to 18-month outlook, possibly seeing a rise in confidence this time next year.

Their reasoning was that from 2021-22, costs went up 32%, which is something that can’t continue without making 2024 difficult for the sector.

The panel said while next year is expected to continue being a challenge, there will be a predicted recovery in 2025.