The Ulster Farmers’ Union (UFU) has called on banks to do more to help farmers get through the financial storm affecting all enterprises.
According to the organisation, this has been triggered by a damaging mix of rising input costs and falling returns, with no signs of any early improvement.
UFU president David Brown commented: “This is as serious a financial situation as many farmers can remember.
“The industry has always had a good and a positive relationship with the banks and farmers have been valued and profitable customers for generations.
“That is why the banks need to do more to respond to this crisis, particularly as the nights drawing in confirms more costly times are on the way for farm businesses.”
Banks should support farmers
The UFU said farmers facing financial difficulties often feel alone, but that this is certainly not the case now.
According to David Brown, this is why farming families need the reassurance that banks will work with them to get through this crisis.
“We are receiving an increasing number of calls from members, and it is depressingly clear there are problems across the industry on farms of all sizes and enterprises,” Brown continued.
“The current market prices are unsustainable and once again, the primary producer is taking the brunt of the price squeeze.
Global dairy markets remain difficult, due to ample global supplies of dairy products and weaker demand, particularly from China. Market assessments for a better final quarter to 2023 now look wide of the mark by a long way.”
The UFU president explained that beef and sheep prices have been, and remain, poor, and input costs are rising relentlessly.
The union has said that against that background, all banks need to do more now to engage with their farming customers in a discussion around what products are available to help ease cash flow problems.
“The UFU will be engaging with banks and other credit providers to ensure farmers are properly supported over the coming months. This is an approach that will head off potentially even more difficult months ahead for farmers and the banks – a clear case of it making sense to talk,” Brown said.
Ulster Bank’s head of agriculture, Cormac McKervey, has confirmed that dairy margins in Northern Ireland are coming under pressure.
“The dairy sector is coming under significant economic pressure at the present time. But the industry has been here before,” he said.
“The structure of Northern Ireland’s milk sector is inherently stable. And Ulster Bank will aim to support customers over the coming months.”
Farming in Northern Ireland came into 2023 with total borrowings in the form of loans and overdrafts sitting at around £1.1 billon.
Monies on account have risen steadily in recent years with that figure currently sitting at around £500 million.