Thursday 27 November 2014

Higher milk prices boost dairy farmers but beef loses out

Published 28/05/2014 | 02:30

Professor Gerry Boyle, Director Teagasc, with the report authors Anne Kinsella, and Kevin Hanrahan, at the launch of the Preliminary Estimates from the Teagasc National Farm Survey's 2013 results. Photo: John T Ohle Photography
Professor Gerry Boyle, Director Teagasc, with the report authors Anne Kinsella, and Kevin Hanrahan, at the launch of the Preliminary Estimates from the Teagasc National Farm Survey's 2013 results. Photo: John T Ohle Photography
IFA president Eddie Downey.

FARM incomes have divided sharply between dairy and beef, with the former sector enjoying huge gains.

Dairy remains the star performer of Irish farming, with average incomes rising to €64,371, thanks to much higher milk prices and output.

But most cattle farmers lose money producing beef and are only kept afloat by subsidies.

A new report shows that the average subsidy to all Irish farms is €19,173, accounting for three-quarters of their income.

But on cattle-rearing farms the costs of production far exceeded the price paid to farmers for their beef last year.

This means that most would be financially better off keeping their subsidies and getting rid of the animals.

The Teagasc National Farm Survey 2013 showed that average incomes on Irish farms rose by 1pc to €25,639. However, this masked "dramatically contrasting fortunes" on different types of farms, with dairy the star performer.

Cattle-rearing farms saw incomes decline by 22pc to €9,469 due to higher production costs associated with severe fodder shortages early last year.

They got an average of €15,811 in direct payments from the EU and the Government, but without these subsidies they would have lost around €6,000 each raising cattle.

Teagasc said this trend had been around for several years, but there had not been the dramatic fall in cattle numbers that might be expected, given that subsidies are no longer linked to what a farm produces.

Many beef farmers are elderly with a lifelong attachment to raising cattle or an off-farm income, which meant they were not economically responsive to the poor returns, while some bigger ones were making decent incomes, said Teagasc director Gerry Boyle.

Irish Farmers Association president Eddie Downey (pictured) said the figures were a "wake-up call" for Agriculture Minister Simon Coveney.

Subsidies

He said the minister should intervene to ensure that farmers get fair payments for beef and that he must get new funding schemes for cattle and sheep farmers up and running.

"These sectors are making a significant contribution to the economic recovery through increased exports and employment; however the reality is that farmers are not receiving a fair and sustainable income," he said.

The Teagasc report shows that sheep farmers saw incomes plummet by 39pc to €11,160 due to lower output and high costs.

On tillage farms, meanwhile, lower prices for grain and a smaller area of crops sown meant that average incomes dropped by 20pc to €30,000.

Teagasc economist Dr Kevin Hanrahan said that while dairy was performing strongly, it was based on a very high milk price of 39.5c per litre last year and remained very vulnerable to price fluctuations.

He said that farmers' overall dependence on subsidies had declined in 2013 compared to 2012, but on beef and sheep farms they still accounted for more than what farmers earned from selling their food.

The report shows that farm incomes are highest in the southeast and lowest in the border counties.

The redistribution of EU farm payments over coming years should benefit farmers in the poorer areas more.

The survey also showed that over 51pc of farmers or their spouses have an off-farm job, up from 50pc the year before.

Irish Independent

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