Farm Ireland

Sunday 17 December 2017

Boost for farming families with hike in cattle prices as milk quotas come to end

Average prices this year would be around 27c per litre
Average prices this year would be around 27c per litre
Louise Hogan

Louise Hogan

A SURGE in cattle prices and a rise in dairy production as the milk quotas came to an end helped family farm incomes record a 6pc rise last year.

However, the Teagasc National Farm Survey puts the average income figures for the farming sector at €26,526 below the average industrial wage.

As farmers cope with plunging milk, grain and pigmeat prices this spring, Teagasc economist Dr Thia Hennessy pointed out the milk price was down almost 20pc on farms last year but income on dairy farms fell by just 4pc to an average of €63,020.

The farm body had expected income on dairy farms to fall further but it was staved off by a rise in milk production and the price dropping later in the year when the bulk of milk had already been reduced.

"Despite the considerable fall in milk price, increased milk production, combined with higher cattle prices, good weather conditions, reduced input expenditure due to lower fuel and animal feed prices, resulted in a 6pc rise in average farm income," said Dr Hennessy.

 After the removal of quotas in April last year, the farm survey shows there was major efficiency gains on dairy farms with strong grass growth last spring and inputs declining.

Almost one in three dairy farmers increased their milk production by 20pc or more, with just one-fifth of farms reducing production.

"The lower milk price in 2015 meant that dairy farmers had to increase their milk output by at least 20pc to just maintain their income at 2014 levels," said Dr Hennessy.

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There was €800m invested by farmers during 2015, with €300m on dairy farms. However, Teagasc said it was surprised that two-thirds had no business related debt with many funding new investment from working capital.

 It found debt on the one-third of the remaining farms was €60,607.

As beef farmers currently cast an anxious eye over the continuing Brexit debate in the UK, the figures show that cattle prices increased sharply in 2015 with income up 29-34pc depending on the type of production system.

 However, Teagasc pointed out it should be noted that income remains low at just €12,904 on cattle rearing farms.

The survey's Mr Moran pointed out that cattle farmers are still reliant on direct payments.

The figures show lamb prices increased by just 2pc, however, the average income on sheep farms was up 8pc at €15,791 on the back of strong cattle prices.

However, income on tillage farmers increased by 16pc to an average of €33,731 mostly due to strong cattle prices and lower fuel prices.

 Yet the survey points out that farming continues to remain highly dependent on direct payments from Brussels.

The average direct payment per farm was €17,000, which accounted for 64pc of farm income in general. However, it accounted for almost 100pc of income on cattle and sheep farms.

Online Editors