A recovery in the price of milk is helping drive an improvement in the fortunes of Northern Ireland’s farming sector, but Brexit continues to present many potential challenges the head of Ulster Bank has warned.
Speaking at the bank’s annual briefing in the Ulster Bank Entrepreneur Accelerator in Belfast city centre, bank chief Richard Donnan said how the future unfolded in relation to the sector was crucial to its ongoing success.
“The agri-food sector is a crucial component of the Northern Ireland economy and we are strongly committed to continuing to support it through the funds we have available to lend and the expertise of our team.
“That includes support for farmers and primary producers right through the supply chain, including some our biggest and best-known food processors.”
“Many potential challenges in relation to how Brexit might unfold remain and how agricultural policy is shaped locally and in Westminster going forward is also crucial.
“However, our local agri-food companies have proven themselves to be adept at focusing on the things they can control so that they are well positioned well to capitalise on whatever opportunities also emerge.
“That means continuing to generate great authentic produce and products, increasing value -add, and through investing in R&D and innovation to improve productivity and distinctiveness.”
Cormac McKervey, Senior Agriculture Manager Ulster Bank, said that farmers are currently keen to borrow money to invest.
“As the fortunes of farmers have improved, particularly in the dairy sector, we are seeing significant demand for investment in land, free range egg units, dairy farm investment and pig finishing units.
“We are keen to support this demand and retain a strong appetite to lend to the agriculture sector.”
Richard Ramsey, the bank’s chief economist in Nothern Ireland, said the figures showed exactly where the wealth had been generated.
“Total income from farming (TIFF) surged by 82% in real terms. This is double the average of the past 20 years, after accounting for inflation.
“It is also a positive story when we look at gross output. Overall – taking into account the various sub-sectors such as dairy, livestock and pigs – there was a 17% increase from 2016, double the rate of growth in input costs.
“This was driven in large part by the recovery in the dairy sector, which saw output rise by 46 percent in monetary terms due to an increase in the price of milk.”