There is always a lot of interest in the Tullamore Farm finances and there was a lot of questions asked at last week’s open day as to how the sucklers and sheep compared in terms of financial performance. One of the strengths of the farm is that everything is recorded and analysed, with a big interest in the bottom line of the farm. While cows and sheep grazed the farm together, for the financial analysis the farm is split into two – with 55ha being apportioned to the suckler enterprise of 85 cows and 25ha to the 250 ewe flock. All output figures are taken from actual sales figures on the farm. Table 1 outlines the performance of the whole farm. The stocking rate on Tullamore Farm is 2.08 LU/ha, or 159kg/N/ha. The farm was stocked closer to 170kg/n/ha in the past and has also applied for derogation for a number of years, but the stocking rate has now settled around 160kg/N/ha and will stay there for the foreseeable future.
There is always a lot of interest in the Tullamore Farm finances and there was a lot of questions asked at last week’s open day as to how the sucklers and sheep compared in terms of financial performance. One of the strengths of the farm is that everything is recorded and analysed, with a big interest in the bottom line of the farm. While cows and sheep grazed the farm together, for the financial analysis the farm is split into two – with 55ha being apportioned to the suckler enterprise of 85 cows and 25ha to the 250 ewe flock.
All output figures are taken from actual sales figures on the farm. Table 1 outlines the performance of the whole farm. The stocking rate on Tullamore Farm is 2.08 LU/ha, or 159kg/N/ha. The farm was stocked closer to 170kg/n/ha in the past and has also applied for derogation for a number of years, but the stocking rate has now settled around 160kg/N/ha and will stay there for the foreseeable future.
Liveweight output was 802kg/ha in 2023 on the farm, with the output per livestock unit coming in at 386kg/LU. This is helped by the under-16-month bull beef-finishing system and is expected to drop a little in 2024, as the farm opted to sell 16 of the 2023-born bulls as weanlings/stores in spring 2024.
Table 2 outlines the output and cost figures for both enterprises.
Total output from the farm in 2023 came in at €198,212 from the cattle and sheep enterprise, driven by €158,857 in cattle sales and €56,258 in sheep sales.
The model on Tullamore Farm is that the BISS and CRISS support payments stay with the farm owners and any other support payments, like ANC, SCEP, Beef Welfare, Eco-Scheme, ACRES and the Sheep Welfare Scheme, remain with Tullamore Farm.
In total, the cattle system is attracting supports of €21,015 (€382/ha), while the sheep system gets €6,365 (€255/ha).
The gross margin for the overall farm for 2023 was €1,231/ha. The cattle system came in at €1,370/ha, while the sheep system came in at €925/ha. The overall gross margin for the farm was €1,040/ha in 2022 and €1,381/ha in 2021. If we take fixed costs, excluding land rent, labour and interest, the farm is leaving a net margin of €43,077, or €538/ha. When land rent, labour, depreciation and bank interest are taken into account, the farm is incurring a loss of €73,447 in 2023. Table 3 outlines the situation if the farm was owned and had a average BISS payment of €210/ha.
The farm would then deliver a net margin of €60,357, or €748/ha. This is the figure that a farmer would have to pay themselves a wage, pay for land rent and pay for bank loans on the farm.
Variable costs
The spiralling cost of feed and fertiliser in 2022 had a severe impact on the bottom line of the farm. Interestingly, looking back at previous year’s fertiliser bills, the fertiliser bill in 2021 came in at €12,747, this went up to €36,185 in 2022 and came back down to €17,445 in 2023. We would expect this year’s fertiliser bill to settle around €15,000, with the current spend in 2024 standing at €12,082.
One area identified as needing attention was the high concentrate bill in 2023. Moving away from finishing all of the bulls in 2024 has dropped the concentrate use on the farm from 74t up until the end of June 2023, to 46t up to the end of June 2024.
This is a €15,000 saving. This decision not to finish all the bulls on the farm will drop output to the tune of €10,000, given we are selling a 400kg bull as opposed to a 650kg bull, so it’s a net saving of over €5,000 when other costs are taken into account.
The average price paid for concentrates in 2023 was €408/t. This has dropped to €360/t in 2024. A combi crop of oats, barley and peas sown in April 2024 and due to be harvested next week will also hopefully reduce our reliance on imported concentrates a little. Our straw bill in 2023 was €4,000 for 200 bales. This is expected to rise in 2024. Animal health costs have also increased over the last few years from €100/cow in 2021 to €134/cow in 2023. Ewe health costs have risen from €14/ewe in 2021 to €25/ewe in 2023.
Comment
The 2023 Tullamore Farm financial analysis highlights the tight margins that drystock farms are operating on and how important support payments are to these marginal systems. Without support payments it simply would not be possible to operate a suckler or sheep system in this country, as the level of risk undertaken would far outweigh the level of potential reward.
The focus for the farm is now to try and reduce the costs of production as much as possible across the four highest variable costs – concentrates, health, contractor and fertiliser. This will be difficult, as the farm is struggling to lift K indexes. It will require investment and any lowering of chemical N application rates will likely be cancelled out by K applications in the back end of the year.
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