27 May 2020
Farm Business & Inputs Council Report May 2020Council Reports, Farm Business & Inputs Reports
Activity Since last National Council
Proposal for Covid 19 Disruption Support Scheme
- Letter was sent with proposal to Minister of Finance (proposal was circulated to National Council).
- The additional capital of €2bn and inclusion of farmers in the Credit Guarantee scheme, renamed the Covid Credit Guarantuee scheme (CCGS), was then announced.
Teleconference with Sean Bell, Chief Economist of DAFM
- Discussed key tax proposals for the 2021 submission, which had been formulated by the Farm Business committee.
- Stressed areas of concern for farmers and how to address them e.g. carbon tax.
Teleconference with SBCI’s CEO and Head of Product Development:
- The additional funds and extension of eligibility to the agri sector for the CCGS were discussed. IFA tried to establish as many details as possible, although SBCI stated that the particulars had not yet been confirmed and had to await formation of the new Government. However, it was stated that farmers who may be interested must get their financials up to date and application process will be via banks, as per normal loan process.
- Future Growth Loan Scheme has also been supplemented by €200m, which was also welcomed as the original fund for farmers had been allocated.
- The other loan schemes available to farmers were discussed – MilkFlexi scheme, SME Finanance Leasing (€17m) and Microfinance lreland COVID 19 Business loan (€17m).
- When all schemes are up and running, there will be a range of loans in terms of size and utilisation to assist farmers.
- Details of all of these schemes were circulated to National Council on 12/5/20 and are available on the Covid section of the IFA website.
Separate teleconferences with PTSB, AIB and Ulster bank re. supports for farmers impacted by Covid-19:
- IFA updated banks on current issues and future problems facing agri-sector due to Covid-19.
- Stressed the need to extend the 3 month breaks to 6 month breaks and that these breaks will not effect customers’ credit ratings – these issues have been achieved.
- Encouraged flexibility in regard to the breaks and repayments e.g. choice of interest only or no capital / interest payments during breaks; tag repayments on to end of loan or have higher payments and remain within initial term.
- Urged banks to remove the need for land valuations for stocking loans during lockdown – this has been successful.
- Highlighted that Co-ops’ & Agri merchants’ credit facilities are becoming maxed out, which will lead to cashflow issues for farmers.
- Emphasised the need for banks to be ready to facilitate the Covid Credit Guarantee scheme, once ratified by the newly formed Government.
- IFA’s pre-budget 2021 submission.
- Further meetings with banks to continue to get updates and provide them.
- Farm Business Committee meeting.
Inputs Update and Market Report
Fertiliser Price Update
Fertiliser demand had eased somewhat owing to the dry weather. However, with the silage season in full swing demand is now picking up again. Dry spring weather across much of the EU saw a significant reduction in fertiliser demand and particularly for nitrogen. This, coupled with falling gas costs and ample supplies, has seen wholesale CAN prices fall further over recent weeks. Irish wholesale bulk cif CAN prices have bottomed out at €159/t, €13/t under the early April price. Importers / blenders are trying to stymy the price drop at farmgate level and this has resulted in a significant price differential emerging across different regions of the country.
|IFA Farmgate Fertiliser Price Survey – May 2020 (big bags, delivered)|
|Product||Min (€/t)||Max (€/t)|
|CAN + sulphur||200||260|
*Quads and 50kg bags +€5/t
Keenest quotes are in the northern part of the country with CAN delivered in big bags under the €200/t and pasture sward less than €300/t. A number of the co-ops are operating a loyalty bonus scheme. In many cases their prices inclusive of bonus are significantly higher (+ €30 to €40/t) than quotes from a number of the private merchants. The keenest quotes are for volume orders and or near cash deals. However, some merchants are offering extended credit terms in order to secure good business. A number of the larger buyer groups are securing discounts on the above quotes.
Non-Grain Feed Ingredient Price Update
A weather premium is emerging in the cereals market as dry weather takes its toll particularly in Southern Russia. Demand for old crop cereal on the home market has largely evaporated, as imported maize competes head on against native cereals. This will result in a carryover of both wheat and barley stocks. Nearby Irish soybean meal ex-store prices have eased as logistics get back on track. Latest quotes are at €350/t from now until September and at €333/t ex-port on a run from Jan ’21 to Dec ‘21. Corn bi-products prices remain strong due to reduced availability on the back of falling ethanol demand.
|Grain and Non-grain Feed Ingredient Prices*|
|Non-grain feed ingredient prices|
|Wheat||€198/t – €200/t||€200/t – €204/t||€190/t|
|Barley||€165/t – €169/t||€166/t – €170/t||€163/t – €165/t|
Activity Since Last National Council
EU AN Expiry Review
IFA in conjunction with the French Wheat Producers Association (AGPB) have submitted a dossier to the EU’s DG Trade Commission Investigation team supporting a case for the abolition of Anti-Dumping duties on Ammonium Nitrate, which have been in place for the last 25 years.
IFA’s earlier campaign succeeded in reducing these duties by approximately 1/3 (€15/t).
IFA has also succeeded in securing support from COPA on this campaign, despite strong opposition from a number of EU member associations.
IFA will continue to lobby EU Trade Commissioner, Phil Hogan, for the termination of these Anti-Dumping duties, which will save farmers a further €32/t.
|Chair||Rose Mary McDonagh|
|Acting Executives||Eleanor Ryan