Out of eight beef farm types, just two models show a positive market-based net margin. On average the dairy-beef and tillage-beef farmers had a positive net margin while there was large variability in gross margin across all beef enterprises, according to ongoing research being conducted by Francis Ryan of Teagasc, Athenry, on 2012 figures. When grouped into the top performing third, the middle performing third and bottom performing third, according to market based net margin, in each of the eight typologies there are profitable farms but only two make a positive return on average. These findings do not include decoupled farm payments like the BPS or agri-environmental payments.

Beef farm typologies

  • extensive suckler farmers
  • hobbyist farmers
  • on- and off-farm diversifiers
  • low earners selling stores
  • dairy farmers
  • on-farm diversifiers
  • mid-earning finishers
  • finishing with tillage farmers
  • (Source: Murphy and Meredith, 2015)

    Viability

    Research presented at the Agricultural Economics Society Ireland's conference on Thursday, 7 January, showed that only 14% of all Irish cattle enterprises were classed as economically viable in 2014.

    "Competitiveness is about survival and not just about being the best," said Fiona Thorne. "Low cost farms in Argentina might be the price leaders but we don’t need that, we just have to hold on to market share."

    However Thorne also stated that the partial productivity indicators are not showing a positive sign for Irish beef production.

    Competitiveness on a cash cost basis for most sectors is positive but the short to medium term outlook for beef is worrying.

    "If we think of cash costs as an indicator of competitiveness,it is a worrying sign for the average size specialist beef producer in the longer term," said Thorne. "If you look at land costs the story deteriorates even more. The opportunity costs of producing beef is high, total economic costs are much higher in Ireland than the returns we get."

    Teagasc is also trying to determine whether participation in beef discussion groups influences on-farm profitability.

    "The level of awareness amongst farmers can be a problem in getting a farmer to participate in a discussion programme," said Thia Hennessy. "This is further reinforced by interaction between participants and advisory services. Dairy has shown inconclusive evidence that economic benefit has only come after financially incentivised participation [in discussion groups]. There may be a risk in creating an inequality between participants and non-participants."

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