Almost 45% of Irish farms earn less than €10,000/year

The average family farm income rose by 9% in Ireland in 2020 to €25,662, the Teagasc National Farm Survey 2020 shows.

In spite of the COVID-19 pandemic, incomes across the various farm systems in Ireland either held, or improved in 2020, the Teagasc annual review of farm incomes has concluded.

The survey, which is representative of over 93,000 farms in Ireland, also highlights that production costs were lower in 2020 as key farm input prices fell.

There was a stark contrast between farm systems

It showed that 43% of farms earn less than €10,000/year, placing them in a vulnerable position in terms of future viability.

It also showed that just 5% of farms had an income of over €100,000/year.

There was a stark contrast between farm systems. For example, 61% of suckler farms earned less than €10,000/year, but just 5% of dairy farms earned less than €10,000/year. This disparity continued on a higher scale, with just 0.57% of suckler farms on an income of between €70,000 and €100,000, in comparison with 21% of dairy farms.

Average income: €74,236 (+12%)

Overall, dairy farm incomes increased from an average of €66,000 in 2019 to €74,236.

Teagasc’s principal research officer Trevor Donnellan said this was due to an increase in milk price and a slight 4% increase in average milk output per farm.

Costs were still higher than other farm sectors, with average overhead costs coming to €58,853 and direct costs at €87,695 – these were largely unchanged from 2019.

Dairy farms made the most use of unpaid family labour and Teagasc economist Emma Dillon said unpaid labour was usually done by the spouse or farm successor, while Donnellan pointed out this could also be the farmer themselves.

Average income: €14,813 (+8%)

In the “cattle other” system, which comprises mainly beef finishing farms, but also includes farms selling store cattle, production costs fell in 2020.

In combination, this resulted in an average income of €14,813 in 2020 for the cattle other system, an increase of 8% on the 2019 level.

The average number of livestock units kept dropped slightly from 47.34 to 46.74 in 2020. Some 43% of farmers in the sector took part in the Beef Finisher Payment scheme – the highest of any sector.

Overall, direct payments for “cattle other” decreased slightly to €461/ha.

The average for all systems was €417/ha. Some 68% of payments came from Pillar I while 32% came from Pillar II.

Average income: €9,037 ( no change)

The average family farm income on suckler farms remained stable at €9,037. This increased slightly in the east and midlands region to €11,216 but sank to around €8,000 in the northern, western and southern parts of the country.

Feed and fertiliser costs decreased by 5% and 4%, respectively, while direct costs increased by 1%.

The average number of suckler cows has been gradually decreasing per farm, from 24.5 in 2018 to 22.3 in ?2020. Meanwhile, the average age of suckler farmers has dropped slightly from 60.5 years of age to just under 58.

Suckler farmers are most dependent on Pillar II schemes, such as BDGP and BEEP, which account for 46% of their payments.

Average income: €18,383 (+24%)

The sheep sector benefitted from lower production costs in 2020 and experienced a strong increase in the value of farm output, which was driven by higher lamb prices.

In common with other drystock systems, on average the level of direct payments for sheep farms was down slightly.

The average income on sheep farms increased by 24% in 2020 relative to the 2019 level to €18,383 in 2020. Across the key output categories, lamb prices performed best, recording a 13% increase in 2020 compared with 2019.

Donnellan noted that the sheep sector had a “very positive” year.

Average income: €32,525 (-1%)

The tillage system experienced poor production conditions in 2020, which led to lower crop yields. In line with other sectors, input prices for tillage farms decreased in 2020.

There was a significant increase in cereal prices in 2020, partially offsetting the impact of the drop in crop yields. The average income on tillage farms fell by 1% in 2020 to €32,525.

Some 38% of tillage farmers took part in the Beef Finisher Payment scheme and received an average payment of €3,865 – showing that a large proportion of tillage farms still keep a beef enterprise.

Gross margin per hectare dropped slightly to €3,136/ha, while the average farmer age was just under 60 years old.