The NFU’s Economics Department has released its latest Farming Outlook quarterly report, predicting mixed fortunes for the various sectors.
The horticulture sector has seen the ornamentals markets get off to a good start in 2007, according to the report, with dessert apple growers receiving improved returns, and brassica prices softening following favourable spring weather.
Potato prices strengthened during the first four months of 2007 but have since eased back ahead of the normal seasonal decline. The dry conditions of 2006 continue to define the root vegetables market.
Land prices have risen steadily in the last few years, on the back of a reduced supply and strong demand, from both farming and residential buyers, the report explained. A detailed analysis of the factors underlying the market leads the NFU’s economics team to conclude that this trend will continue.
“In the short to medium term, supply of land is likely to be restricted, while losses of land from agriculture will continue with land being taken for development or for mineral extraction or forestry”, the report suggests.
“These losses are likely to remain at a low level relative to the total agricultural area but can be significant in absolute terms. Further land is likely to be lost through the proposed managed retreat in coastal areas.
The report goes on to say that unless there are significant changes in the taxation regime as it affects land, there is no reason to suppose that prices will fall in the near future. Instead they will be expected to continue mirroring their long-term growth path.
