Optimism levels among Irish food and agri-business small and medium-sized enterprises (SMEs) have reached a five-year low, according to a new ifac report published today (Tuesday, September 13).

The global Covid-19 pandemic and the Russian invasion of Ukraine have led to the highest levels of inflation for nearly 40 years, resulting in a 23% drop from last year's rebound in optimism levels of 77%.

The fifth annual Food and Agri-business Report 2022, The big SME squeeze shows that 36% of businesses have experienced a 21% or higher increase in input costs, while 84% reported an increase in costs this year. 

Disrupted supply chains have led to a significant increase in stock management costs, and 63% of respondents cited rising costs of raw materials as the biggest threat to growth.

The report also found that salary expectations are increasingly becoming a barrier in recruiting, and that Brexit continues to have an impact with travel disruption, tariffs and reduced access to raw materials from the UK.

"Especially given Bord Bia's plans to increase Irish exports to around €800 million within three years," ifac CEO, John Donoghue said.

Despite a vast number of challenges, 82% of food and agri-businesses have maintained or increased their turnover in the past 12 months, according to the newest ifac report.

Other key findings include:

Responses presented in the Food and Agri-business Survey were provided in the summer of 2022; 43% of the sample is drawn from micro businesses and 40% from small businesses, with a good spread from across the country.