With the USA exhibiting signs of diplomatic, trade and political aggression towards Europe, farming funding is likely to be affected, while tariffs would be crippling.
When America sneezes, the whole world gets a cold, they say.
Tirlán, Ireland’s biggest farmer co-op, has a similar relationship with Glanbia, the plc it grew and then uncoupled from.
Tirlán remains Glanbia’s biggest shareholder and Glanbia shares account for a significant proportion of Tirlán’s asset base.
So when Glanbia sneezed on Wednesday, losing 24% of its share value, Tirlán saw €260m of value evaporate in a single day’s trading.
And when you consider the amount of Glanbia shares owned by farming families and others across Leinster and east Munster, you can probably add another half a billion euros in lost share value.
Of course, these losses are latent and would only be realised if people actually sold their shares. The big question is whether the Glanbia share price can recover fully and, if so, how long will that take?
I confess that I have no idea as to the answer to those questions, but I would think the answer lies in understanding what precipitated the share price collapse. Like most events, it seems to be an accumulation of a few different factors rather than one single smoking gun.
Firstly, the unexciting results were coupled with an equally dull projection as to earnings in the year ahead. That is in part due to high whey prices, curbing margins for Glanbia’s golden goose, high-quality protein products (which, conversely, is good news for Tirlán’s balance sheet and for milk price).
Secondly, the final, inevitable concession that the Slimfast brand, which has been an unmitigated disaster since its €350m acquisition, would not be turned around. It will be sold, if a buyer can be found.
There is a third factor, I think. Glanbia has a significant footprint in the US – and the US is a significant export market for Glanbia’s nutritions and ingredients products produced on this side of the Atlantic.
And, right now, that has to be categorised in the “not a good thing” bracket. Because President Donald Trump and his administration seem to have hay fever.
Rise of right in Germany tempered
It was a week that began with the result of the German general election. After the monumental and consequential year of elections that was 2024, it was the first big election of the year so far.
And the big story was the rise of the far-right AfD, which gained 20% of the first-preference vote.
We have seen far-right parties make gains in the Netherlands and Austria, in power in Hungary and Italy (although Giorgia Meloni has been a nuanced Italian prime minister thus far).
Israel’s government is the most right-wing and hawkish in my lifetime and its response to the despicable Hamas terrorist attack in October 2023 has been disproportionate and callous.
We have seen the British Conservative party and the US Republican party with the most right-wing leadership and the most right-wing membership in living memory. And, of course, Russia and China are in the grip of rulers as autocratic and dominant as any tsar or emperor.
But it feels even more visceral to see the rise of the far-right in the country that the Nazi party emerged in to wreak havoc on the world like no other. They coupled a nationalistic fervour with a consuming hatred of minorities, particularly Jews, but also the Romany community, the disabled and homosexuals. I’ve been to Auschwitz and Birkenau – and it changes you forever.
Perspective
While the AfD’s rise is concerning for anyone who knows their history, it must be looked at in the proper context. Firstly, they may have finished in second place, but they will not be in government and the other parties have not even countenanced sitting down with them to discuss that possibility.
Secondly, they are isolated politically. True, in the run up to the election, the centrist CDU party forwarded a bill on immigration that garnered support from the AfD, which drew criticism from other parties. But that may be viewed as a pre-election stunt, unless it happens again in the future.
Looking at the spectrum of parties in the Bundestag (German parliament), the overall balance is otherwise towards the centre and left. The next government will be anchored by the CDU (Christian Democrats). This is the party of Angela Merkel, who would be similar to Fine Gael (their partners in the European Peoples Party in the European Parliament) or Fianna Fáil.
The three other parties who will be represented in parliament are all left of centre. The outgoing Government, the SPD (Socialist Party), finished third with over 16%. They would be similar in outlook to the Labour Party or perhaps the Social Democrats. In fourth place, with 12%, were the Green Party, (you can guess this one yourself). Finally, Die Linke, a left party (think Solidarity/PBP) gained 9%.
The remaining 14% was shared among minor parties and independent candidates, who didn’t gain the 5% threshold needed to get into parliament. There is little evidence of any significant hard-right presence among them. While the far-right are gaining, the centre is holding.
There was one notable feature of the AfD’s support base. It is significantly higher in the old East Germany, where they were the most popular party in every region. They failed to top the poll in any region of the old West Germany.
The right has gained traction in many parts of the former Soviet Union sphere of influence, most obviously through Orban in Hungary and Lukashenko in Belarus.
Calin Georgescu – far-right, pro-Russia populist candidate – had a shock success in the recent Romanian presidential election, gaining enough support to win a place in the second round two-candidate run-off.
That result was voided by the Romanian courts, as Russian influence was uncovered. It is a worrying trend, particularly as young men are strongly trending hard-right, with social media a significant factor.
Migration and security the key issues
Migration and immigration is the leading issue attracting people to the hard-right. It has become a defining issue of this moment. There are absolutely no easy answers to the questions we all must ponder.
But to understand the picture properly, we have to stand back a little from the question of how we cope with people from Africa, Asia and Central and South America gravitating towards Europe, the US and Canada. We need to ask why are they leaving their place of birth in such numbers.
We are the ones who have shaped the world
The answers to that question (for there are many) all make uncomfortable reading for anyone living in in Europe or North America. Because we are the ones who have shaped the world – the whole eight billion of us.
There is hardly a square yard of the planet that hasn’t been claimed and fought over by European settlers. The wealth of the world was plundered by empires from countries as tiny as Belgium, Portugal and the Netherlands, never mind the United Kingdom, France, Germany, Italy and Spain.
And borders were drawn – often arbitrarily on maps by jobsworths – dividing peoples and tribes. Sometimes it was careless and accidental, often it was deliberate to keep the locals fighting each other and in thrall to the colonial power.
Much of the global instability we see today is a legacy of that. And much of the deprivation we see is a result of the plunder of resources in the so-called developing world. Sometimes that plunder was during the colonial era, but much of it continues to this day. It might be local despotic leaders, but ask yourself this – where do the despots buy the weaponry they need to keep their people oppressed?
Absolved
So Europe cannot absolve itself of responsibility for displaced peoples. And that’s before we talk about the destabilising effect of climate change on food systems in the developing world.
Of course, it’s also true that Europe cannot take hundreds of millions of people. But the main reason that less well-off people are struggling to find homes and to make ends meet is not because of migrants – legal or illegal. It’s because of inequality and because our housing capacity has not come close to recovering from the shock of the banking collapse that scuppered the economy in 2007.
If we are looking for someone to blame, we could start with Seanie Fitzpatrick, Sean Dunne and Sean Quinn. And the politicians and regulators who left us so vulnerable through light-touch regulation.
The vulture funds brought in to help clean up the mess may have been necessary, I’m not qualified to judge that, but they have outlived their usefulness and are holding way too much of our housing stock at the expense of families and first-time buyers. We have to all work together to pick up the pieces and hope the lessons have been learned.
CAP budget coming under unprecedented pressure
What does any of this have to do with the price of milk or eggs? Well, the big news in farming last week was Commissioner Christophe Hansen outlining his vision for the next CAP.
In order to achieve a simpler system that supports farmers, both in producing food at little or no farmgate margin and safeguarding the environment, we need a CAP that is much better funded.
As I’ve pointed out before, the CAP fund is no bigger today than it was in 1992. Inflation has massively shrunk the value of that fund, which is now catering for nine million farmers across 27 countries, as opposed to six million farmers across 12 countries 33 years ago.
But how much money can the EU or the member states individually commit to agriculture? The security demands – already increased over the last decade due to migration – have been transformed by naked Russian aggression. The invasion of Ukraine three years ago changed everything.
And now the re-election of Donald Trump as US president means that Europe must look to itself to support Ukraine and defend its borders. Only last weekend, Minister for Defence Simon Harris said that Ireland needs to double its annual spend on security and defence from €1.5bn to €3bn. That €3bn dwarfs the annual CAP envelope coming from Brussels and the national funds going into CAP – combined.
So farmers need to brace themselves for a very tough conversation around funding of CAP. We also need to factor in the potential cost of a trade war with the USA, which now seems inevitable. People keep saying that Donald Trump doesn’t mean what he says, but he keeps doing the things he says he’s going to do. And that is a bad thing for Europe.
It’s also, in my opinion, a bad thing for the US people, but they voted for him and gave control of the Senate and the House to his Republican Party (and it really is his party now, dissent is not tolerated), so that’s their own business.
Everything is changed utterly, to quote Yeats, but I don’t see any beauty in it.
Friday’s ambush a dark moment
The exchange between Donald Trump, JD Vance and Volodymyr Zelenskyy on Friday evening was extraordinary. I wasn’t particularly surprised it happened, but I was still saddened by it.
The Ukrainian president had a very narrow diplomatic pathway to traverse when he visited the president and vice-president in the Oval Office. He was sitting beside Donald Trump, who has wrongly called him a dictator with only 6% support among the Ukrainian people.
President Trump has also wrongly asserted that Ukraine started the conflict with Russia, before ratcheting that back to say Ukraine had provoked Russia into invading Ukraine. That, of course, is equally untrue.
Donald Trump has further begun negotiations with Valdimir Putin regarding a ceasefire in Ukraine, without including Ukraine in the process. He also wants Ukraine to sign away half a trillion dollars worth of their precious rare earth minerals to the USA in exchange for any further protection. That figure is a multiple of the total the US has sent in military and financial aid to Ukraine since the conflict started. It’s a shakedown.
The US has moved from being the global policeman to a country moving closer to Russia and away from their traditional allies in Europe.
Donald Trump says he wants to move the border with Canada and has begun referring to Canada’s prime minister as “governor”, implying that Canada is no more than a 51st US state.
He also wants to buy or seize Greenland. He is threatening massive tariffs on Canada and Europe, partly due to them disagreeing with these ambitions.
Donald Trump has proposed seizing Gaza as a piece of real estate, evacuating the three million Palestinians who call it home. On Thursday, he shared an AI-generated video that absolutely ridiculed the Palestinian people, with bearded belly dancers (in sharp contrast with Trump’s anti-trans stance domestically) and with Donald Trump and Benjamin Netanyahu sunbathing on the Gaza beachfront, while Elon Musk walks around in a rainshower of dollars, in front of a giant gold statue of Donald Trump.
His vice-president has accused Europe – and separately the UK – of suppressing free speech. The AfD in Germany were endorsed by Elon Musk and JD Vance, Donald Trump’s two key acolytes. Musk has also given support to Georgescu in Romania.
It was initially JD Vance who started the row in the Oval Office. He accused Volodymyr Zelenskyy of disrespect because of how he was dressed and because he didn’t thank President Trump for the support the US has given thus far.
A video of the full meeting shows Zelenskyy had actually done so at the outset. As to his dress, Zelenskyy has consistently dressed in fatigues since Russia invaded, in solidarity with Ukrainian soldiers on the frontline.
If there was a protocol informing him to wear a suit, I imagine he would have done so. But Elon Musk gave a press conference in the Oval Office in a jacket and t-shirt last week and his son on his shoulders and Donald Trump and JD Vance seemed not to think this disrespectful. Musk is wielding an unprecedented amount of power for an unelected person – he makes Henry Kissinger look like a press officer.
This is not normal. The USA has moved from being the schoolyard monitor to the schoolyard bully, threatening your lunch money. The Trump administration is demonstrating all the trappings of autocracy and seems comfortable with Russia expanding their territory across other sovereign nations. Indeed, they seem intent on getting in on the act themselves. China are licking their lips, while Taiwan, South Korea and Japan are extremely nervous.
Farming must brace itself
There are implications of all this turmoil and tumult for farming. In a trade war, inputs may get dearer, while commodity prices may tumble. Re-nationalisation of markets may further affect export volumes and value if the Patriot Games continue.
This might not be easy, but it’s time for Europe to step up and show leadership now. Donald Trump is not wrong when he says that the USA has given trillions in support around the world over the last 80 years, going right back to the post-World War II Marshall Plan, which helped fund the rebuild of Europe’s cities and economies.
And if the USA is now choosing a different role, it falls to Europe, which shaped the modern world through empire-building, to step up.
This could get very difficult for EU farmers, but there may be no way around the challenges Europe faces.
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