Optimism levels have plunged to a five-year low for Irish food and agribusiness SMEs, according to a new report conducted by ifac.

The Food and Agribusiness Report 2022, titled The Big SME Squeeze, shows that continued concerns over material prices, inflation and climate issues sees just 54% of those surveyed reporting optimism for the coming year. 

Optimism within the agribusiness industry had been rebounding in recent years, with 2021’s level reaching 77% — a four year high.

However, a harsh business climate in the wake of external factors has largely reduced this progress.

84% of those surveyed reported input cost increases, with one in three seeing increases of 21% or higher. Two thirds of respondents said they are struggling to find the right staff, while the same proportion cite rising costs of raw material as the biggest impediment to growth. 

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Various cost-saving measures are being undertaken, with three out of four businesses exploring ways to cut costs and 65% mulling over price increases.

However, enterprises are managing to stay above board for the most part, with over four out of five (82%) reporting maintained or increased turnover in the past year. 

David Leydon, head of Food and Agribusiness at ifac, commented: “This is a tough time for Irish food and agribusiness SMEs following a global pandemic. One of the biggest challenges is rising input costs and for many to maintain margins this means implementing challenging price increases. 

“At ifac, we have many more ways to help food and agribusiness during these turbulent times and some are documented within this year’s report.

"Ultimately we share the goal of SMEs across the sector – to ensure that Irish and international consumers alike can enjoy the very best products Ireland has to offer.”