Listen: ‘Brazil will push us when it gets its act together’
Ulster Unionist MEP Jim Nicholson has said that support is needed for the suckler beef sector in Northern Ireland.

Suckler beef farming in Europe will be coming under further pressure from imports as Brazil develops its traceability and production regulations, Northern Ireland MEP Jim Nicholson has said.

Speaking at the annual Irish Farmers Journal breakfast event at Balmoral Show, Nicholson said that during a recent trip to Brazil he had seen two different types of farms – ones that produce for domestic consumption and then larger farms that are export-focussed.

“The farm I was on killed 112,000 cattle in one year. When I was there at Easter they had killed 20,000. They've got their own vets and they have got their own agronomists,” the Ulster Unionist MEP said.

Listen to "Jim Nicholson on Brazil and Brexit" on Spreaker.

“Nobody can tell me that these people will not be pushing us when they get all of their act together. That will be a difficult time for our suckler and beef producers, because there is no way we can compete with the climate they have,” he said.

Nicholson added that support is needed for the suckler beef sector in NI to maintain a supply of beef. Without suckler farms, he said, the dairy herd cannot fill the gap with beef supply domestically.

“You will be leaving yourself wide open to imports coming in from outside,” he concluded.

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NI dairy farms make progress in clearing debt
Danske Bank is expecting debt levels on Northern Ireland dairy farms to continue to reduce.

Dairy farms in Northern Ireland (NI) have continued to make progress in repaying debt, Danske Bank’s head of agribusiness Rodney Brown has said.

Speaking to reporters in Belfast on Thursday, Brown said that the recovery in milk prices over the past two years has allowed some dairy farmers to clear debts completely.

“There are still a few that struggle, but those numbers are in their tens rather than anything else,” he said.

“If fundamentally it’s a good business behind it and it's properly managed, we will work with them with restructuring. If the fundamentals of the business aren’t right, tinkering around the edges will not address the issues,” Brown said.

Borrowed sector

Dairying is the most borrowed sector in NI farming.

Extended overdrafts and interest-only loan repayments were required by many in the sector when milk prices were on the floor.

The most recent figures from DAERA show that the average debt on borrowed dairy farms in NI stood at £109,515 in 2016/17.

“We would expect the trend to be definitely down this year… The expectation is that debt will be further reduced as we go forward,” Brown maintained.

Volatility

During his presentation, Brown said that extra cash available this year is allowing dairy farmers to catch up on investments that were sidelined when finances were tight.

However, he warned that volatility will continue to be a factor in the future.

“It’s about managing your debt, paying it down whenever the cash is there,” Brown told reporters.

Borrowings in other sectors are significantly lower than dairying and 43% of all farms in NI were carrying no debt at all during 2016/17.

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Egerton runner-up in BGS final
Fermanagh suckler farmer, John Egerton, has finished runner up in the grassland farmer of the year competition run by the British Grassland Society.

Fermanagh beef and sheep farmer John Egerton has finished runner-up in the British Grassland Society’s (BGS) grassland farm of the year competition.

Having been awarded the grassland farmer of the year title from the Ulster Grassland Society back in January, John was put forward as the sole representative from NI.

Out of the 11 farmers entered in the final, the judges whittled the applicants down to the final three farms, with John up against dairy farmers from England and Wales. The three finalists received a visit from the judging panel in August.

The eventual winner was Richard Rogers from Angelsey, who milks 350 cows on 90ha in a spring-calving system.

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Dairy commodities facing price pressure
Dairy markets remain under pressure, which has seen a fall in the latest milk price indicator.

The latest milk price indicator (MPI) from the Ulster Farmers Union has fallen 0.58p to 27.99p/l. Allowing for a deduction of approximately 2p/l to cover a processor margin and transport costs, it would bring the MPI closer to an approximate farmgate price of 26p/l.

The reduced MPI is reflective of the latest downward trend in dairy commodities markets with the GDT and Dutch Dairy Board auctions facing price pressure.

This week’s GDT auction recorded a small price index drop of 0.3% to US $2,885/t. It is the fifth auction in a row to record a negative outcome. The index price has fallen by 15% since June.

Allowing for exchange rates, the latest index would convert to a milk price of approximately 28p/l before processing costs.

While butter rose 2.4% and skim milk powder was unchanged, whole milk powder and cheddar prices fell.

Industry analysts point to increased production levels in Europe, and a strong start to the production year in New Zealand, as being key factors in reducing the demand for dairy commodities.

Meanwhile, the council of EU agricultural ministers announced earlier this week that there will be no fixed price intervention scheme for skim milk powder during 2019.

Intervention had been set at €1,698/t and last used in 2017 as a method of removing a surplus of milk powder from the market. However, there is little appetite from the EU for another intervention scheme.

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Fifth consecutive fall in GDT