Sheep farmers had a “positive” year in 2020, with strong prices and an increase in on-farm investment.

Speaking during a presentation of the Teagasc national farm survey (NFS) on Monday, principal researcher Trevor Donnellan said that it had been a “very positive story on sheep”.

Higher lamb prices meant that sheep farm incomes increased by 24% to €18,383.

This appears to have had a knock-on effect on on-farm investment, which rose from just €3,803 to €7,085 in 2020, with the bulk of investment going into machinery, followed by buildings and land improvements, with an average of €3,700, €2,900 and €390 being spent respectively on each area.

Ageing demographic

Despite the good year for the sheep sector, it still had the highest number of farmers or their spouses in receipt of a pension (41.8%) - indicating the ageing demographic of the sector.

Unsurprisingly, the sector with the highest income - dairy - also had the highest on-farm investment, though figures show that dairy investment and borrowing does appear to be slowing.

Some €17,600, €10,600 and €2,400 was spent on machinery, sheds and land improvements respectively.

The survey also showed that dairy farm participation in TAMS had dropped from 14% to 5%, with an average TAMS payment of €29,419 - significantly higher than the next-highest TAMS payment of €14,567, which went to the tillage sector.

Farm debt

Overall, two-thirds of 93,000 farms the survey represents were debt-free.

Some 63.89% of dairy farms carry debt and, again, this is almost double the 32.82% of tillage farmers, which is the next-highest sector.

Average debt levels across all sectors was €21,228 and the majority of these were for long-term loans, except in the case of tillage farms, where 42% of loans were from a finance company and represents their reliance on machinery.