It was always going to be a tough task. The aim was to try and cover all costs including variable costs, fixed costs, land rent, labour and loan interest. Tullamore Farm Ltd fell short of this in 2021.

However, the farm is in a unique position in that it pays full labour, land rent and does this without any basic payment.

Table 3 outlines the scenario where the farm is owned, provides its own labour and also has a basic payment similar to the payment that the farm is receiving at the moment.

This would mean a net margin of just under €80,000 to pay any extra labour that may be employed on the farm, to pay the farm owner a living wage and meet any capital repayments that the farm may have.

Progress has been made in reducing costs but this progress will be short-lived given that we estimate inputs to increase between 30% and 40% in 2022.

Output prices have been good for the first half in 2022. However, beef price in particular has taken a huge hit in the last four weeks. The first load of bulls drafted in 2022 were sold at €5.80/kg while the final draft left the farm at €5.09/kg.

Meanwhile, meal has risen to €433/t in 2022.

Without a significant increase in beef price, the bull beef system will come into serious question in 2023.

After a review carried out in 2021 by Paul Crosson in Teagasc, it was decided to stick with the bull beef system but this will be reviewed on an annual basis.

The 2021 accounts demonstrate the importance of supports to drystock farms and the next round of CAP will pose a real challenge to farms like Tullamore Farm.