Farm incomes may on average have held up in 2013. However, this masks massive income instability for the drystock sector.

Both surveyed beef cattle systems, cattle rearing and cattle finishing, recorded sharp falls in 2013, with sheep farm incomes falling further. The drystock sector is utterly dependant on direct payments, with a negative income when the Single Farm Payment, disadvantaged payments and agri-environmental schemes are taken out of the equation.

The per-hectare income figures best show the gap in earning capacity from the various sectors. Dairy farms earn €1,170/ha, sheep farms only €207/ha. At least sheep farms have some scale, averaging 54ha, similar to dairy’s 55ha. The average cattle farm is only 40ha, so the low earnings on cattle-rearing farms of €246/ha, is worrying.

Dairy

Jack Kennedy

The average family farm income for dairy farms of €64,371 in 2013, a 31% increase on 2012, is very welcome, but can seriously misrepresent the situation on many smaller dairy farms, or where land quality is poor, increasing costs above the normal. 2013 will live long in the memory for no spring forage or grass, but good milk prices. Price volatility is the big threat.

The gap between the top and the bottom is getting wider. 24% of dairy farms (one in four) had incomes of below €30,000, while 17% earned over €100,000. The average income per labour unit was almost €50,000.

Cattle

Padraig Foley

Elevated costs and reduced output inevitably hit cattle incomes, which the record factory prices of 2013 could not fully counteract.

Cattle farmers are utterly dependant on direct payments, which make up 117% of family farm income. These direct payments fell last year, and will fall again in coming years as REPS is replaced by the lower paying AEOS and GLAS, and flattening of payments reduces direct payments on cattle farms, especially finishers. If the market cannot make up this shortfall, contraction seems likely. The Dowling report could not come at a more critical time.

Sheep

Darren Carty

Sheep farmers are somehow surviving on an average income of only €11,160, a drop of almost 40%. It can only be a part-time pursuit for many. Smaller lamb crops due to poor weather in the 2012 breeding season and worse weather again for lambing, saw output down 10%. Direct costs rose 7%, with feed a large component, particularly during the fodder crisis. Forage costs were up 54%, meal costs 22%.

Sheep farmers receive the lowest average SFP of €200/ha, which will increase under CAP reform, particularly for hill farms, but direct payments fell in 2013, with the loss of REPS hitting hard.

Tillage

Andy Doyle

Tillage farmers will not be surprised to hear that average incomes declined by 20% in 2013. Sharp growers quickly realised that any improvement in yield was more than offset by lower product prices. Costs were slightly lower. The few who sold crops forward for 2013 benefited considerably as harvest prices fell by up to €40/t from January prices. Farms surveyed also had fewer acres in tillage in 2013. The average family farm income in 2013 was €29,907 compared to €37,151 in the more difficult 2012. The drop in spending power has already been noticed in the decline of machinery purchase.