The disappointing returns from sheep farming have been under the spotlight since earlier this year when National Farm Survey preliminary estimates were released during “crisis sheep meetings”. The final results published this week make for equally unsatisfactory reading.

The average family farm income generated on the 13,979 farms covered in the dataset fell by 21%, or over €4,300, to €16,454. This equates to €366/ha on the average farm size of 45ha. The vulnerability of sheep farming enterprises over the last 18 months to two years is reflected in the fact that 110% of the return derived from direct payments – ie farmers had to utilise €36/ha of direct payments to supplement sales revenue and cover costs.

This compares to direct payments accounting for 91% of family farm income in 2021.

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In excess of 40% of farms earned less than €10,000 in 2022, while the number earning between €10,000 and €20,000 fell by 6% to 18%. There were 21% of farms generating a return of between €20,000 and €50,000, down 4% on the previous year while just 7% earned above €50,000.

The significant drop in returns stemmed from escalating input costs. With costs remaining high in 2023, there is not forecast to be any marked difference in margins in 2023.