Farmers and the agri-food sector can rely on support from the banking sector, says Cormac McKervey, Head of Agriculture at Ulster Bank.

Last year, farmers were dealing with rising input costs and falling prices, especially for milk. This year, despite some reduction in costs and an improvement in milk prices, farmers still face tough times, not helped by the atrocious weather.

Cash flow problems are an issue on many farms. However, McKervey says the bank can provide additional support to help farmers through the difficult period.

Looking at the different farm sectors, he said producer prices are doing well in most cases, in particular for beef, lamb, milk, poultry meat and eggs –especially free-range eggs. He added that, hopefully, an up-turn in weather conditions will enable potato and grain farmers to catch up on planting.

Farmers are also having to cope with environmental pressures, and McKervey encouraged them to engage with the on-going soil nutrient health scheme and to adopt carbon audits and green energy schemes.

Problems emerging around planning issues and ammonia emissions need to be resolved. And for livestock farmers, bovine TB remains a very serious problem with no clear solution in sight. Lending

From a banking point of view, agriculture is a strong sector and Ulster Bank is keen to lend.

Land prices are at or near all-time highs, and there is a strong demand against a limited supply coming to market.

Bank deposits held by farmers, at £611m, are not far off the all-time high of £674m. And bank lending to the sector was £973m in the fourth quarter of 2023, below the earlier figure of over £1bn.

Balmoral Show launch

McKervey was speaking at the launch of Balmoral Show 2024, where Ulster Bank is the principal sponsor.

At the event, economist Richard Ramsey said the Bank’s ‘Ulster Fry Index 2024’ – a measure of food shopping costs for NI consumers had fallen slightly compared to the previous year, overall, down by 0.9%.

There were falls in the cost of butter (down by 7.6%), milk (down 7.1%), bacon (down 2.8%) and mushrooms (down 2.6%), but this countered by increases in tea (up by 6%), eggs (up 3.2%), pork sausages (up 2.5%) and sliced loaf and margarine (both up 1.4%).