Dairy farm debt levels averaging €850 per cow
Dairy farmers who have taken out loans to invest in equipment and fund expansion in recent years are now running debt levels averaging €850 a cow.
The latest snapshot of farm incomes from Teagasc showed overall income had slumped 9pc to an average of €24,060 last year on the back of poor milk and grain prices.
Despite a fall-off of 17pc in dairy income to €51,809, it still remained far ahead of earnings from suckler farms at €12,908 on average, with sheep farms at €16,011.
A "strong rebound" to an average of €75,000 has been forecast for dairy incomes in 2017 on the back of rising milk prices and production flows. Yet it was tillage that was singled out by Teagasc director Professor Gerry Boyle as the "biggest challenge" on the back of a 10pc fall in income to €30,816. The experts warned poor grain prices are forecast for the year ahead and there are large stocks hanging over the market.
Farmers curbed the spending last year with investments back 13pc at €690m, with over €245m spent on dairy farms.
Two thirds of farms are carrying no debt with investments often funded out of cashflow but on the remaining third the average debt is €63,764.
Yet the National Farm Survey showed for the 59pc of dairy farms with debt, the average amounts to just over €99,000 or €850 per cow.
"The highest debt is on the farms that have expanded the most and that is in the region of €1,100 per cow," said Teagasc economist Brian Moran. "I don't want to be scaremongering - if we look across the EU the debt levels on Irish farms are very low."