This is a subscriber-only article
Financial margins on store-to-beef farms in NI hit a 13-year low in 2018-2019, figures from DAERA confirm.
The latest results from the department’s annual farm business survey show that the average gross margin on beef finishing units stood at £125/ha last year.
It represents more than a fourfold drop from the year previous, when gross margins averaged £579/ha, and it is the lowest level since 2005-2006, when £104/ha was recorded.
Gross margin is defined as enterprise output minus variable costs, so it does not include fixed costs such as machinery and conacre costs, as well as labour.
DAERA estimates that fixed costs (excluding labour) on cattle and sheep farms typically ranged from £315/ha to £580/ha in 2018-2019, highlighting that beef finishers had negative net margins last year.
The survey results indicate that gross margins stood at -£50/ha on beef finishing units categorised as “below average”. It means that these finishers were already losing money on cattle even before fixed costs were considered.
All livestock
The farm business survey found that average gross margins in all livestock enterprises were lower in 2018-2019 when compared to the year previous.
On suckler farms, average gross margins fell by £40 to £246/cow in lowland areas, dropped by £32 to £163/cow in disadvantaged areas and reduced by £42 to £140/cow in severely disadvantaged areas (SDA).
Similarly, gross margins on sheep farms fell across land types. The biggest drop was in disadvantaged areas where the average gross margin fell by £10 to £36/ewe.
Elsewhere, gross margins averaged £53/ewe in the lowland, £32/ewe in crossbred SDA flocks and £16/ewe in hill-bred SDA flocks.
In the dairy sector, the average gross margin reduced by 6% to £986/cow. The pig sector had a sharper decline, with gross margins down 23% to an average of £36/head on birth-to-bacon units.
Arable sector
However, the opposite trend was seen in the arable sector last year, with average gross margins in the DAERA survey up across all enterprise types.
Spring barley was up by £424 to £960/ha, winter barley rose by £547 to £1,628/ha and winter wheat was up £373 to £1,550/ha.
By far the biggest increase was in ware potatoes, where the average gross margin more than trebled year on year to £5,808/ha.
SHARING OPTIONS: