Dairy farm incomes dropped by 31pc to €61,000 in 2018 due to surge in feed costs and adverse weather

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Claire Fox

Claire Fox

A dramatic increase in feed costs in 2018 due to adverse weather led to a 31pc decrease in dairy farm incomes and 22pc drop in cattle rearing incomes last year, according to the Teagasc National Farm Survey.

Dairy farms incurred the largest income reductions in 2018, with average dairy farm income falling by 31pc to €61,273, compared with the 2017 level of €88,829. Concentrate feed use increased by almost one-third to over 1,300 kg per cow

Average family farm income on cattle rearing farms dipped to an estimated €8,318 in 2018, a reduction of 22pc on the €10,642 in  2017, with a sharp rise in production costs the main driver.

Other cattle farms, which comprise a range of cattle production systems (e.g. cattle finishers) other than suckler production systems, also experienced an income drop, due to higher input expenditure, but it was not as steep as that which occurred on cattle rearing farms.

Average Cattle Other farm income in 2018 was €14,408, a reduction of 11pc on the 2017 figure of €16,115.

Teagasc Director Gerry Boyle noted that it was a "historically low income" for cattle rearing farmers and added that there would be an inevitable reduction in suckler cow numbers over the coming years.

Meanwhile Teagasc Economist Emma Dillon stated that while she thinks cattle incomes for 2019 will be static, she envisages the outlook to be more positive for dairy.

"Dairy farm income has been particularly volatile over recent years due to price and weather induced shocks so overall for 2019, the weather has been better and milk price is holding up and the outlook in terms of global supply is fairly positive. The most recent GDT auction has shown a negative result but overall things are positive on dairy side. On the cattle rearing I think it will remain fairly static to be honest,” she said.

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Sheep farms also experienced an income reduction in 2018, with higher than normal levels of feed and fertiliser use. Average Sheep farm income fell from €17,357 in 2017 to €13,769 in 2018, a reduction of 21pc.

In 2018, in general, winter sown crops fared better in terms of their yield performance than spring sown crops. 

While crop yields on tillage farms were well below average trend yields, farmers benefitted from a large jump in harvest prices in 2018 relative to 2017.

In spite of the low yields, this price increase was large enough to boost the average income in tillage farms in 2018, which was €42,678, an increase of 18pc on the 2017 figure of €36,048.

Across the farm sector as a whole, the average family farm income in 2018 declined by 21pc dropping from €29,774 in 2017 to €23,483.  However, the average on individual farm systems continues to vary greatly. 

The extent to which weather had an impact on individual farm incomes in 2018 depended on factors specific to each farm, including local weather, farm type, soil type, stocking rate and the mix of winter and spring crops sown.  

Good late season grass growth and an extended silage making campaign helped to avert even steeper increases in production costs late in the year and stemmed the erosion in farm incomes. 

The survey, which is based on an internationally recognised methodology, is drawn from a representative sample of farms around Ireland.

Data for the survey was gathered by the Teagasc team of NFS farm recorders who visit over 800 farms across the country throughout the year. The survey covers the principal land based agricultural sectors in Ireland, dairy, beef, sheep and tillage.

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