The highly informative Teagasc review and outlook conference this week painted a bleak picture for prices in 2022. The extent to which increased fertiliser, feed and energy costs will erode farm margins is almost unprecedented. Although costs increased in 2021, they were more than offset by increased prices in most sectors, giving rise to increased incomes across all the main production sectors.

While average national farm income increased significantly in 2021 (+20%), the dairy and tillage sectors were the main drivers of the increase. However, the margin pressure forecast for 2022 will see incomes fall by 19% on 2021 levels, with all sectors forecast to experience sharp falls.

Average tillage farm incomes are forecast to fall 34% to just below the average of 2019 and 2020, while average dairy income, although forecast to fall, will remain above 2020 levels and high in the historic context. Forecast costs of 30c/ litre for milk production are remarkable and are likely to affect milk growth in 2022, notwithstanding forecasted strong market returns.

The outlook for fertiliser prices remains uncertain. Teagasc estimates that prices will increase 120% on 2021. Availability of supply for the coming season remains a concern and utilisation on farm may decline. On the outlook for supply, Trevor Donnellan commented that even if farmers want to use the same amount of fertiliser next year, it may not be available.

In the tillage sector, Fiona Thorne pointed out that there is little flexibility to reduce fertiliser on an individual crop basis as most farmers are working to target yields requiring specific N P and K application.

The expectation for the dairy sector is a reduction of 15% in fertiliser use in 2022 with some substitution between silage and concentrate likely.

This week's cartoon

\ Jim Cogan

No let-up in politics of gas

Comments by United States national security adviser Jake Sullivan following US president Joe Biden’s video call with Russian president Vladimir Putin will heighten concerns of prolonged high gas prices in Europe.

It appears that Washington is pressuring Germany to suspend Nord Stream 2, the controversial gas pipeline between Russia and Germany. If Russia does invade Ukraine, as the US has signalled it may do, Nord Stream 2 will be included in a package of retaliatory measures.

The incoming German coalition government has been less forthright in its support for Nord Stream 2 than Angela Merkel’s government. However, it has backed it with now new German chancellor Olaf Scholz having said he felt bound by Merkel’s commitments on the near-ready pipeline.

Scholz will stand by Merkel’s stance that Germany could sanction Russia if it uses gas as a geopolitical weapon against Ukraine.

While Europe and the world need to stand by the rights of Ukraine and its people, it would seem that gas is now so politically charged that there is little hope of any price relief in the near term.

Surely, as Matt Dempsey suggests this week, it is time for Ireland to re-look at the Shannon Estuary proposal to build a liquid natural gas terminal – opening up the opportunity for gas imports from the US and Qatar rather than waiting at the end of a pipeline from Siberia.

Newspaper Magazine of the Year

Congratulations to the Irish Country Living team on a well-deserved win at the NewsBrands Ireland Journalism Awards last week. The team took home the award for Newspaper Magazine of the Year 2021. The awards seek to celebrate and highlight journalistic excellence and the important role journalism plays in society across 22 categories. Irish Country Living was judged against its peers on subject matter, rigour of reporting, writing style, integrity and impact.

To come out on top against such a strong shortlist reinforces the importance of the magazine to the households of the farming community and rural Ireland. Well done all.