Feed and fertiliser costs knock €570m off margins

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Ciaran Moran

Ciaran Moran

Extra feed costs associated with last summer's drought and higher fertiliser charges contributed to knocking more than €570m off farmer margins in 2018.

New figures from the CSO underline the income pressures which farmers faced last year as a result of farmgate price cuts, soaring input costs and historic weather events.

Operating surpluses in agriculture were back almost 17pc or €576m, dropping from €3.4bn in 2017 to €2.85bn in 2018.

The main reason for the massive decrease in farming surpluses was a 13pc hike in consumption and input costs, which increased by €690m.

Higher spending on animal feed and fertilisers, which increased by €356m (+27pc) and €69m (+13.5pc) respectively, accounted for most of the input cost increases.

It comes as a 3.1pc decrease in cattle output, combined with falling prices, resulted in an overall drop of €101m (-4.3pc) in the value of cattle disposals. Their value fell from €2.36bn in 2017 to €2.26bn in 2018, driven in part by Brexit uncertainty.

A recent survey revealed that more than a third of beef farmers are uncertain if they will be farming in five years.

Changes in value of farm produce in 2018:

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  • Beef - Down €101m
  • Dairy - Down €39m
  • Pigs - Down €58.1m
  • Tillage - Up €265.6m
  • Sheep - Down €9m

While the volume of crops produced by Irish farmers fell, increased prices resulted in an overall increase in the value of tillage output, which rose by almost 15pc from €1.82bn to €2.09bn, an increase of €265.6m.

Milk output increased by 4.6pc in volume terms, but falling prices resulted in an overall reduction in its value, which decreased €39m (-1.5pc) to €2.55bn. The value of pig output decreased €58m (-11.3pc), dropping from €517m to €459m, while the volume of pig production rose by 1.3pc. Total consumption on farms was up €690m (+13.0pc), rising from €5.31bn in 2017 to €6bn in 2018.

Last year's summer drought had a clear impact, with expenditure on feeding stuffs increasing by €356m to €1.68bn, due primarily to a 20pc hike in the volume of feed purchased by farmers.

Farm Expenditure 2018

  • Feeding stuffs - Up €356m
  • Fertiliser - Up €69m
  • Machinery, equipment - Up €23m
  • Farm buildings - Up €36m
  • Veterinary expenses - Up €5m

Meanwhile, both the volume and price of fertilisers consumed by Irish farmers also increased during 2018. A volume increase of 9pc combined with a price increase resulted in an overall increase of 13.5pc in expenditure on fertilisers. The cost of these fertilisers increased by €69m to €582m.

Farm expenditure on energy and lubricants increased by €34m (+9pc), increasing from €390m in 2017 to €424m in 2018.

Up to 30,000 farms are now classed as economically vulnerable and at risk of poverty. The Teagasc National Farm Survey showed that the average farm income in 2018 dropped 20pc to €23,483.

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