independent

Wednesday 30 July 2014

Farmers suffer sharp drop in income levels

Published 20/12/2012|20:50

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FARM incomes in Ireland dropped by 12 per cent over the past 11 months to an average of €21,500 in what has been an extremely difficult year for farmers, according to newly released Teagasc estimates.

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However, Teagasc economists say the impact on farm incomes in areas such as Kerry and Cork has been even greater than this. Wet summer weather had a very serious effect on farming in southern and eastern regions where dairy and tillage are most prevalent. This had a substantial negative impact on dairy and tillage farm incomes, which fell by a much larger percentage than the national average.

Prices for beef, pigs and tillage crops all increased in 2012 thanks to improved market conditions and favourable exchange rates. However, at the same time prices for milk, lamb and cereals declined in 2012.

On the cost side there was a dramatic rise in feed use in grassland agriculture systems in 2012, as a consequence of the bad summer weather which made grazing, fertilizer application and silage-making difficult on many farms. Tillage yields in 2012 were also severely depressed due to abnormal weather.

According to Teagasc's Agricultural Markets and Farm Incomes review of 2012 and Outlook for 2013, the income on dairy farms is estimated to have declined by 27 per cent in 2012 to an average of €50,000. While tillage farms are estimated to have experienced income drops of up to 20 per cent following the poor year for cereal production. By contrast, income on beef farms increased marginally as prices for cattle remained relatively strong throughout the year.

Looking ahead to 2013, Teagasc predicts average farm incomes should recover but not to 2011 levels. Even though further increases in fertiliser and fuel costs are on the cards in 2013, feed costs should fall compared with 2012 due to lower usage. Prices for milk and pigs are set to rise in 2013, while beef and sheep prices should remain steady. The outlook for cereals prices remains highly dependent on global weather conditions over the next six months.

Also of note is that the ending of some agricultural support payments in 2013 will have a negative impact on income on beef and sheep farms. Overall, Teagasc economists expect average family farm income to rise next year but they expect the percentage increase to be in the single digits.

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