Across the website this week, we report on the 64th annual general meeting (AGM) of the IFA. The mood was one of concern for the future with uncertainty around Brexit very much front of minds.

Addressing the AGM, Minister for Agriculture Michael Creed went further than before and put a figure on the cost of a no-deal Brexit for farmers.

As Amy Forde reports, the minister said that if the UK were to implement a tariff regime in line with World Trade Organisation (WTO) rules, the cost imposed on Irish food exports would be €1.7bn. With our agri-food exports to the UK currently valued at €4.5bn per annum, this equates to a 37% increase in costs.

To put this into further context, the €1.7bn tariff bill is on par with what Irish farmers draw down each year under CAP. Assuming the tariffs are reflected in farmgate prices, the figure would be aligned to the recent analysis carried out by the Irish Farmers Journal showing the potential for the beef price to fall to €2.50/kg.

Acknowledging that the UK may decide not to impose tariffs in the event of a no-deal Brexit, Minister Creed accepted that such a scenario would be equally as damaging because of the obligation under WTO that zero tariffs would be applicable to every third country – therefore seriously undermining the value of the UK market for Irish produce.

There is no doubt that the ongoing political turmoil in Westminster has helped focus minds on the potential for a no-deal Brexit and the implications on farm incomes in Ireland.

In his address at the IFA dinner on Tuesday night, An Taoiseach Leo Varadkar confirmed to farmers that the Government had alerted the European Commission to let them know that an application for aid would be made.

Details of how any aid package for farmers would be constructed remain unclear. But the Taoiseach did highlight that Government would also be seeking assistance under the Common Market Organisation (CMO).

The CMO provides mechanisms to manage severe market disturbances, including intervention and aid to private storage. Questions are rightly being asked as to the suitability of either mechanism to adequately deal with the market challenge that a no-deal Brexit would create – both with the potential to create a long-term overhang in the market.

However, under the CMO, there is also scope to introduce exceptional measures and aid to specific sectors. In the past, we have seen the Commission provide targeted aid packages to member states and voluntary supply management measures under CMO regulations. Therefore, there is room for the Government to look for a direct aid package for farmers affected and even put in place a compensation package for farmers looking to reduce production.

It raises the question: is the Government considering a voluntary supply management package for suckler farmers seeking to reduce cow numbers in the event of a market collapse? Some would no doubt see merit in the context of climate change but a beef reduction scheme would be very different to the milk reduction schemes of the past.

In the first instances, the introduction of such a scheme would actually increase beef production due to increased heifers and cows coming on to the market.

A more sustainable option would be to look at the potential to introduce a tariff equalisation scheme as an exceptional measure.

Such a scheme would secure support from the EU to directly offset the tariff rate imposed on food exports into the UK under a WTO regime. It would also mean that we retain our presence in the UK market and on retail shelves.

In the more immediate situation, Minister Creed came under intense pressure from farmers at the AGM on the current beef market. Farmers put forward a strong argument that with prices running €100 per head behind last year – and with severe delays in getting bulls slaughtered – they are already feeling the impact of Brexit.

Despite this, the minister ruled out any market intervention prior to the end of March.

Infant formula: transparency key to retaining trust of dairy farmers

In AgriBusiness, Lorcan Allen shines a light on two of the largest infant formula companies in the world, Wyeth (Nestlé) and Danone. Both have sizeable manufacturing footprints in Ireland and buy significant volumes of dairy ingredients from Irish co-ops every year.

However, analysis by the Irish Farmers Journal reveals the enormous profits that these companies have enjoyed from their Irish businesses, often while paying rock-bottom prices to Irish farmer co-ops for high-quality, safe and traceable dairy ingredients.

At the same time, both companies have taken steps to conceal the profitability of their Irish operations using mechanisms available to them under Irish corporate law. While there is nothing illegal in what they have done to reduce the visibility of the financial performance of their Irish businesses, it is concerning given the importance of these multinationals as buyers of Irish dairy products.

With the livelihoods of thousands of farm families dependent on these companies, transparency in the full supply chain has never been more essential. By concealing profitability, the infant formula companies risk losing the trust of Irish farmers, as the Irish beef industry has done.

As agriculture is Ireland’s largest indigenous sector, the Government needs to review company law to prevent large entities from concealing their financial performance.

Environment: limit on emissions another farm quota

Minister Richard Bruton, alongside IFA president Joe Healy and secretary general Damian McDonald, addressing the IFA AGM. \ Finbarr O'Rourke

Minister for Communications, Climate Action and the Environment Richard Bruton certainly didn’t play to the crowd when he addressed the IFA AGM on Wednesday.

As Thomas Hubert reports, the minister told farmers that the Government will set a limit on greenhouse gas emissions for agriculture.

While rejecting claims from the IFA that the move was effectively an environmental quota, it is difficult to see how an emissions ceiling would not curtail future growth.

While Brexit is dominating the political agenda, this is an issue where farmers must ensure that any targets set for the sector are done on an informed basis and by those with a solid understanding of the complexities of the industry.

The formation of an interdepartmental group would certainly help in achieving such an outcome.

Factory leagues: variation within prices paid by factories

Also this week, we publish the Irish Farmers Journal’s factory price leagues for 2018.

The purpose of the league tables is to allow farmers identify which factories are most active for the type of animal they produce.

If we look at the base price grade for steers and heifers, the variation across factories can be 10-15c/kg – or the equivalent of €35-€55 per finished animal.

The prices differentials across plants is significantly higher in the case of cows and bulls and at the upper and lower ends of the conformation scale. Farmers selling stock should study carefully.

Sheep: well-run sheep systems hold their own

The lowland sheep conferences held by Teagasc this week were once again well supported by farmers.

The sector is often overshadowed by dairy and beef due to lower output value. But is an important part of Irish agriculture and one that has achieved steady progress in recent years.

As Darren Carty reports on pages 44-45 the top-performing farms are returning a gross margin of €1,195/ha, or a net margin equivalent to €650-€700/ha.

While behind dairying, the figures compare favourably to other sectors.