Tillage incomes took the biggest hit in 2019, falling 15% to €34,437 due to lower prices, the Teagasc National Farm Survey has revealed.

While tillage incomes were down, average family farm incomes rose marginally in 2019 to €23,933, a 2% rise.

Teagasc said that a combination of factors were responsible for the increase in income in 2019, with better weather making for good production conditions, but lower output prices were experienced in some sectors.

Due to the extreme weather experienced in 2018, farmers incurred a large increase in production costs that year.

However, weather conditions in Ireland were more favourable for production in 2019 and this reversed much of the increase in spending on feed, fertiliser and silage-making that had occurred in 2018, according to Teagasc.

While it said that the cost reductions should have been enough to boost incomes in agriculture in 2019, market conditions led to a reduction in output prices for cattle and cereal crops in particular, with the price of milk also falling.

BEAM and BEEP boost

The Beef Exceptional Aid Measures (BEAM) and Beef Environmental Efficiency Programme (BEEP) shored up some beef farmer incomes.

The BEAM payment in particular supported the incomes on eligible participating beef farms and also supported incomes on qualifying sheep and tillage farms with a cattle enterprise.

The provision of additional support payments in the form of BEAM added €780 to the average suckler farm in 2019, while payments under BEEP were worth on average €482 in 2019.

Teagasc said these payments also helped tillage and sheep farmers who were involved in cattle as a second enterprise.

Profitable

Dairying continues to be the most profitable farming system, with a further increase in milk output increasing incomes by 9% to an average €66,570 in 2019. It had the highest income per hectare at €1,132/ha and a gross output of €215,279 on average.

The benefit of lower production costs in 2019 for suckler farmers was partially offset by lower cattle prices. However, the receipt of BEAM support on those farms participating in the scheme, combined with lower costs of production, produced an average income of €9,188 in 2019, an increase of 11% on the 2018 level.

There was a 4% increase in farm size to almost 32ha

In 2019, the average gross output on suckler farms increased by 2% year on year to €36,715, with the average direct payment increasing by 12% to €14,706.

The average gross margin on a per-hectare basis was €763 in 2019, an increase of 4%. There was a 4% increase in farm size to almost 32ha, with the proportion of rented land declining. Total livestock units increased to 36.7.

The average income on cattle finishing farms fell by 6% to €13,893 in 2019. There was a reduction in production costs in 2019 as feed use fell by 11% from the elevated levels required in 2018.

On average, direct production costs decreased by 6%

However, the fall in cattle prices in 2019 offset the benefit of lower costs.

In 2019, total costs decreased by 3% on finishing farms year on year.

On average, direct production costs decreased by 6%, with expenditure on purchased concentrates down 12% to €6,889 on average, Teagasc said.

The average gross margin per hectare on finishing farms was €888 in 2019, up marginally on 2018. This included a basic payment of €299 per hectare.

The sheep sector continued to struggle financially despite better weather conditions last year.

Incomes for the sheep sector remain low despite a 9% increase in 2019 compared to the previous year.

The 9% rise in incomes was due to lower production costs thanks to better weather last year. Over one-third of farms earned less than €5,000.

Overall, just 4% of sheep farms earned more than €50,000 last year.

Direct payments increased slightly year-on-year and went up to just shy of €19,320. Teagasc said this was mainly down to the ability of sheep farmers who also keep cattle to access the Beef Exceptional Aid Measure (BEAM).

The average farm was 47ha with 133 ewes and a basic payment of €245/ha.

Fertiliser expenditure increased in 2019, up 4% to €14,400 on average

Dairy farm incomes rose by 9% last year, with milder winter and summer conditions contributing positively to incomes.

Figures from the Teagasc National Farm Survey 2019, show that the average income was €66,570, with over half of farmers reporting an income of over €50,000 and 20% earning more than €100,000. “Fertiliser expenditure increased in 2019, up 4% to €14,400 on average. This was due to lower levels of usage being more than offset by higher prices,” Teagasc reported.

“Likewise, machinery hire expenditure, which relates to contracting charges also increased, up 3% per cent to €11,444. “Other livestock and veterinary costs remained stable on average, accounting for €10,759 on the average dairy herd.”

Average herd size was 80 cows.

The average income on tillage farms fell by 15% in 2019 to €34,437, with lower prices wiping out any benefit of increased crop yields.

Average gross output increased by 1% on tillage farms in 2019 to €117,687, with Teagasc saying that this was due to a combination of factors, with lower output prices offset by higher yields.

Costs increased on tillage farms in 2019 by 10% to reach €83,250. This was due to both an increase in individual cost items and a slight increase in overall tillage area on surveyed tillage farms.

The average farm gross margin was €1,236/ha and this included a basic payment of €322.

In 2019, some 26% of tillage farmers earned a family farm income of more than €50,000.

Machinery drives farm debt levels

Farm investment and debt levels were mixed last year but a standout feature was a 75% jump in investment on tillage farms. Machinery-related investment appears to have been the driving force behind the investment. It accounted for 64% of investment on tillage farms (€13,059) and between 57% and 69% on drystock farms last year.

Dairy farms continue to have the highest debt levels, rising 8% to €112,377. “Given their comparatively higher income levels, the average debt to income ratio of 1.5 [on dairy farms] in 2019 was much lower than for drystock,” Teagasc said.

Almost two-thirds of farms, across all systems, have no farm business-related debt.

Good weather leads to drop in feed use

Better weather conditions last year meant most farms spent less money on concentrates. An average 80-cow dairy herd spent €36,521 on concentrates, which marked a 14% decrease compared to the previous year.

Feed volumes averaged 1,122kg/cow in dairy herds, which was lower than the exceptional period in 2018 but still higher than 2017. Bulky feed costs were also down at €4,763.

On suckler farms, concentrate feed use decreased by 20% on average to €3,197 and on other types of cattle farms concentrate usage was down 12% to an average of €6,889.

Purchased concentrate costs decreased on sheep farms by 18% to €6,929, which helped sheep farmer incomes to increase last year.

Border counties rely most on direct payments

Farmers in the border counties are the most reliant on direct payments, accounting for 142% of family farm income in 2019.

A similar situation is evident in the west, where the average family farm income was just under €16,483. Here, direct payments comprised 104% of income. The equivalent figure for farms in the midlands region was 87%. Direct payments account for a significant proportion of farm income across the other regions also, ranging from 56% to 73% of income in 2019.

Compared with 2018, the relative contribution of direct payments to family farm income in 2019 increased in some regions, but fell in others.

One-third of farms viable

Only 33% of farms in Ireland are sustainable, 33% are vulnerable and just 34% are viable.

A farm is defined as being economically viable if family farm income is sufficient to remunerate family labour at the minimum wage (which is assumed here to be €20,129 per labour unit), and provide a 5% return on the capital invested in non-land assets.

Only 19% of farms in the north and west were classed as viable

Dairy remains the most viable system at 75%, followed by tillage at 63%. Forty-three per cent of suckler farms and 39% of sheep farms are classed as vulnerable. Only 19% of farms in the north and west were classed as viable.

Farms found not to be viable, but which have an off-farm income source are considered to be economically sustainable.

Milk production and stocking rates

The average amount of milk produced per hectare in 2019 was 11,799l. The difference between milk produced and sold is that fed to calves, Teagasc said. That differential tends to be smaller in years when milk price is higher.

In expanding production and improving the milk yield per cow, the dairy stocking rate has also increased.

In terms of the average dairy herd size, the figure increased from an average of 64 cows per farm in 2010 to an average of 80 cows in 2019

In 2010, the average dairy stocking rate was 1.9LU/ha. The average dairy stocking rate has increased appreciably since then, dropping slightly in 2018, due to the adverse weather conditions, but increasing again in 2019 to 2.09LU/ha.

In terms of the average dairy herd size, the figure increased from an average of 64 cows per farm in 2010 to an average of 80 cows in 2019.

Some 825 farms took part in the 2019 Teagasc National Farm Survey. A random, nationally representative sample is selected annually in conjunction with the Central Statistics Office (CSO) to represent those farms with greater than €8,000 of standard output. Pig and poultry farms are not included in the survey, due to the inability to obtain a representative sample of these systems, according to Teagasc.