Teagasc released its annual family farm income statements for 2022 this week and like any financial analysis, how and what is included needs to be factored into the understanding of the numbers.

Before anyone even attempts to understand the farm income numbers, we must realise that the high rate of general inflation in Ireland over the last 18 months has eroded the real value of income across all farms.

So even if income is up substantially, the reality on the ground is that buying power is much less. We must also remember the numbers described as family farm income are not ‘profit’ numbers like other businesses are often described in these pages.

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Essentially this measure of family farm income is the return for the time that the family put into farming and producing food, day and night, 365 days a year.

On the dairy side, this year costs will rise higher and milk price has already dropped over 16 cent/litre before we account for the May milk price cuts.

The dairy income projections as discussed last week mean income on dairy farms will halve in 2023 on dairy farms that also face substantial tax bills later this autumn.

We have seen the incidence of off-farm employment by the farm holder rise higher in cattle and sheep enterprises. Now 44% to 45% of cattle and sheep holders have off-farm employment.

It’s no surprise as both of these enterprises are very exposed to cost increases and price drops, and of course any change in direct payments has a huge impact on the bottom line.

Direct payments make up 152% of family farm incomes on cattle rearing farms and 110% on sheep farms. It’s only 14% for dairy farms.

The reality is the BEEP S details released this week and the other new suckler cow scheme (SCEP) already announced are firmly part of family farm income, and without them sucklers just don’t stack up.