1. Land – the huge potential of a limited resource Peter Young Irish Farmers Journal

2. Land area of Ireland 6.9million hectares 6.9million hectares 4.4million hectares - agriculture - 64% 4.4million hectares - agriculture - 64% 650,000 hectares for forestry - 9.4% 650,000 hectares for forestry - 9.4% 80% devoted to grass 80% devoted to grass 11% to rough grazing 11% to rough grazing 9% to crop production. 9% to crop production. Beef and milk production -60% of agricultural output at producer prices. Beef and milk production -60% of agricultural output at producer prices.

3. Ireland’s agriculture and food industry Largest indigenous sector Largest indigenous sector Total employment of 155,000. Total employment of 155,000. Over half of Ireland’s indigenous exports Over half of Ireland’s indigenous exports Represents nearly one tenth of the Irish economy. Represents nearly one tenth of the Irish economy. 2006 - Total turnover of Irish food and drink is estimated at almost €20bn 2006 - Total turnover of Irish food and drink is estimated at almost €20bn –with relatively low import content.

4. Irish Food & Drinks Exports Category2005€m2006(e)€m 2006/200 5 % +/- Dairy Products 1,9632,080+6 Beef1,3401,525+14 Poultry257237-8 Pigmeat238250+5 Sheepmeat189180-5 Live Animals 150200+33

5. Key Economic Statistics for Agri-food Sector, 2005 Primary agriculture Food processing Agri Food total %age of total Gross Value Added* 2.7%5.7%8.4% Employment5.7%2.8%8.5% %age total exports* 5.2%3.3%8.4% * Estimated. Source: Department of Agriculture & Food, Fact Sheet of Irish Agriculture2006

6. Land – limited resource Not making it anymore Not making it anymore –NDP 2001-2006 – 40,000 acres swallowed up  Clonee – Kells motorway –1,700 acres for 50 km road –Housing etc. ? –Set to continue  New NDP plan

7. Increase in land price CSO

8. RETURNS FROM FARMING Year Gross Margin Cow/Acre Land Price €/Acre Yield / Acre % 19968206,47412.67 19978066,88811.70 19988008,5399.37 199979510,5777.52 200079512,6516.28 2001795136205.84 200278413,8115.68 200372813,9455.22 200462315,3524.06 200564517,3183.72 Note: Gross Margin calculated on one cow per acre producing 4,500 litres annually. Source of information: Teagasc – Management Data for Farm Planning. Land prices taken from CSO data on agricultural land sales.

9. Relative Cost to install a cow Year Cost to install cow Margin Years to repay 1972€2050€3806 1980€4100€4809 2006€26800€55049

10. Where we have come from 30 years protection 30 years protection Guaranteed prices Guaranteed prices Export restitutions Export restitutions Quotas and Tariffs Quotas and Tariffs Politicians set prices Politicians set prices Land price not related to economics Land price not related to economics Developed bad habits Developed bad habits

11. Now 2005 – Decoupling Freedom to farm 2005 – Decoupling Freedom to farm 2007 – Cross compliance 2007 – Cross compliance 2015 -Milk quotas gone (if not before) 2015 -Milk quotas gone (if not before)

12. Food Price Index 1950 - 2000

13. Wheat Price Index: 1316 - 2000

14. Cereal stocks at historic low

15. US plans bio and renewable fuels Current 5.4 bn gallons Current 5.4 bn gallons Coming on stream 6.2 bn gallons Coming on stream 6.2 bn gallons 2017 35 billion gallons 2017 35 billion gallons –Worlds largest exporter of corn - exports 20% of it’s corn –Ethanol would require over 300 m tonnes of corn –39-50 million more than current production –Need other sources

16. China - shakes the world 1.3 billion 1.3 billion 1984 - China was one fourteenth the size of US economy 1984 - China was one fourteenth the size of US economy 2005 - China was one sixth the size of a much bigger US economy 2005 - China was one sixth the size of a much bigger US economy Prediction 2030 - Chinese economy could be larger than US economy. Prediction 2030 - Chinese economy could be larger than US economy.

17. Adapt or fade away

18. Distribution of Irish Beef Exports, 1995 to 2006 (%)

20. Looking forward Era of low grain prices over Era of low grain prices over Increased demand – China, India Increased demand – China, India Bio fuels creating another use for land Bio fuels creating another use for land –expected to double each year for the next 3 years. High input – grain fed confinement system will suffer High input – grain fed confinement system will suffer Grass based system – huge benefit Grass based system – huge benefit

21. Challenges ahead WTO – concerns WTO – concerns Need to adapt Need to adapt Industry efficiency – dairy Industry efficiency – dairy Farm efficiency – scale + low cost systems Farm efficiency – scale + low cost systems Developing niches Developing niches –Ireland inc. –Individual farmers