Analysis: It’s a good time to be a dairy farmer, but Brexit means income volatility lurks on the horizon
It was undeniably a tale of two halves when it came to what farmers had in their pockets this year.
You’d be forgiven for thinking you had donned a pair of rose-tinted spectacles when looking at the headline figures from the Teagasc Annual Review and Outlook, as it depicted an outperforming sector, with farm income surging by around 30pc to €31,900 – a sharp rise from €23,500 in 2016.
Yet it was, as the Teagasc economists cautioned, driven in the main by the “dairy story”.
As the figures show, margins from suckler cows remained relatively stable, beef farmers saw income lift 8pc, while pig, cereal and sheep farmers also saw improved prices.
However, the average market-based net margin in tillage stood at just €50 a hectare – a stark difference from the €1,800/ha net margin in the dairy sector.
None of the other sectors came anywhere close to the dramatic rises in the dairy sector.
After prices plummeted in 2016, many of the country’s 18,000 dairy farmers who had taken out loans for infrastructure to expand in the new, post-quota Europe were showing unhealthy levels of stress.
Yet over a year later, prices were back up and hit an average of 36c per litre. As the Teagasc figures show, dairy farm income soared to €91,000 on average, the highest-ever figure and up €40,000 on the 2016 level.