The economic viability of Irish farms hit record lows in 2023, with just 27% of Irish farms deemed to be viable last year, according to data from a new Teagasc sustainability report.

The previous year, in 2022, some 43% of Irish farms were considered to be economically viable.

In line with the hit to incomes shown in the Teagasc national farm survey earlier this year, dairy and tillage farms had the highest percentage loss in terms of economic viability.

In terms of dairy farms, 52% were deemed economically viable in 2023, down from 93% in 2022.

Tillage farms also saw a significant drop in their viability, down to 34% from 78% the year previous.

Some 23% of cattle farms were considered viable last year, a drop of four percentage points year on year.

The viability of sheep farms almost halved. A total of 14% were viable, dropping from 27% the previous year.

The sustainability report launched on Tuesday 29 October was compiled using data from the Teagasc national farm survey and used a representative sample of almost 800 farms.

The metric used to determine viability by Teagasc puts family labour at or above minimum wage and a farm is considered economically viable when sufficient income is generated to provide an additional 5% return on non-land-based assets.

Vulnerability

There were also record high levels of farms considered to be socially vulnerable last year.

Some 31% of farms were considered vulnerable in 2023, up from 24% in 2022.

Some 22% of dairy farms fell into the vulnerable bracket last year, up from 4% in 2022.

Cattle farms stayed the same year on year, with 32% deemed vulnerable.

The highest of all sectors, 38% of sheep farms were vulnerable last year, an increase from 26% the previous year.

The percentage of tillage farms considered vulnerable more than doubled in 2023 at 25%, up from 12%.

A farm is considered vulnerable if there are non-viable income levels without off-farm employment.

Worrying trend on dairy farms

In terms of hours worked, dairy farmers continue to put the most hours in on farm, with an average of 49 hours per week. The report has shown this is trending upwards in recent years.

Lead author of the report Dr Cathal Buckley of Teagasc’s rural economy and development programme called this a “worrying trend” and questioned whether it is sustainable.

Urea

The report also illustrates the continuing adoption of actions to address environmental emissions, particularly by dairy farmers.

Since the report began 10 years ago, both the uptake of protected urea and low emissions slurry spreading (LESS) has increased dramatically.

The percentage of total chemical nitrogen (N) applied in the form of protected urea averaged 27% across all dairy farms.

However, its use across drystock farms remains low at between 3% and 6% of total chemical N applied.

Responding to a question at the report’s launch seminar, Buckley said: “We have to move to protected urea if we want our emissions to go down.”

In 2023, 81% of slurry on dairy farms and 38% on cattle farms was spread using LESS equipment.

Emissions

Measured on a whole-farm or per-hectare basis, it is notable that greenhouse gas emissions declined on the average dairy farm in 2023, compared with the preceding years, on the back of reduced chemical N fertiliser use and slightly lower stocking rates.

However, the emissions intensity of production (carbon footprint of milk production) increased slightly due to lower milk output in 2023.

Dairy farm ammonia emissions, whether measured per hectare or per farm, also declined, while the ammonia emissions intensity of milk production increased.

However, dairy farms had the lowest N/ha surplus in 2023 relative to any year since the report was first published.

Teagasc said this has a positive implication in limiting the impact of dairy production on water quality.