Coronavirus: Minister warns of 'crisis' in NI agri-food industry
Northern Ireland’s agri-food industry is under major pressure as markets collapse and prices paid to farmers continue to fall.
About 100,000 jobs depend on farming and food and the coronavirus lockdown is having a major impact.
Agriculture Minister Edwin Poots has warned of a “crisis” and is making the case for financial support.
He said firms and farms could go out of business unless action was taken to help them.
Restaurants, cafes, the catering sector and work canteens have all been closed for weeks and sales of meat and dairy through this so-called “food service” sector have dried up.
That impact is being felt all the way along supply chains, as farmers see a drop in prices paid for animals and processors watch domestic and export markets disappear.
There has been an increase in supermarket sales, but it has not been enough to compensate for the losses.
Sam Chesney, a farmer near Kircubbin, County Down, is turning out premium beef animals.
He has seen a drop in price of £75 a head in the past fortnight, taking a huge chunk out of his profit margin.
He said he is “very, very concerned” as animal feed and fertiliser prices continue to increase.
Mr Chesney said farmers cannot sustain losses for long.
“We have people knocking our door every day for their money, for contractor’s fees, for fertiliser bills, the banks are on our doors as well.
"It’s unsustainable and many farm businesses will go out of business.”
Beef processors are facing big problems too.
Food service would have accounted for about a third of the meat they produced.
While there has been a huge demand in supermarkets for mince, there is virtually no market for premium cuts like steak and much of it is being frozen and put into cold stores.
Prices for by-products like skins and animal fat, used in a range of products, have plummeted.
Processors estimate they are down £200 a carcass overall.
The dairy sector is feeling the pressure as well.
It too would have sold a huge amount of milk, cream and butter into food service.
Global markets for milk powders that are made in Northern Ireland are also in freefall.
It will almost certainly lead to a cut in the milk price paid to farmers.
The average price paid is 25p per litre, but that is likely to fall when dairy co-ops announce the monthly price in coming days.
With most farmers already losing money at the current price, that will mean more pain in the dairy sector.
'Urgent help needed'
The Northern Ireland director of Dairy UK, Mike Johnston, said government support is going to be needed.
“We urgently need the government or the EU to step in and that there’s cash going on to dairy farms.”
He said something similar to the grant support for the small business and tourism sector would help, but it was needed “urgently”.
Agriculture Minister Edwin Poots told the assembly earlier this week that he would bid for more than £100m from the Department of Finance to support agri-food.
But, given the amount required, he believed it was more likely it would come from the UK government or the EU.
He told the assembly the “crisis” was happening now and required an immediate response.
“If we’re to have an agriculture sector when this is over, if we’re not to have numerous bankruptcies, then we need to respond to it and respond to it quickly," the minister said.