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EU payments critical for beef with barely '10pc economically viable'

Direct payments continued to keep cattle farms going last year, accounting for up to 50pc of total gross output on cattle-rearing and finishing farms.

Less than 10pc of cattle-rearing farms were economically viable businesses last year, Teagasc figures show.

While the average farm family income (FFI) increased by 7pc on cattle-rearing farms and by 5pc on store and beef cattle ('cattle other') farms, both systems were loss-making enterprises last year.

The 23,500 cattle-rearing farms represented in the National Farm Survey are mainly suckler herds.

Stronger cattle prices last year resulted in an 11pc lift in the market-based gross output from these farms.

However, these farms continue to rely heavily on direct payments to survive and, last year, direct payments accounted for half of the gross output on cattle-rearing farms.

The majority of cattle-rearing farms are small farm businesses, with only 8,000 of the 23,500 farms exceeding 30ha in size.

Teagasc analysis found that almost 40pc of cattle-rearing farms earned €3,500 or less last year, while less than 10pc earned €20,000 or more.

Despite these very low incomes, farmers on more than two-thirds of cattle-rearing farms have no off-farm job, resulting in a large number of cattle rearing farms being classified as economically vulnerable.

Meanwhile, FFIs on 'cattle other' farms increased by 5pc last year, compared to 2009.

Market-based gross output increased by just 2pc from 2009 to last year, which was not enough to offset the 5pc decline in the value of direct payments. Spending on inputs such as feed and fertiliser rose by 4pc.

Like their counterparts in suckler production, cattle feeders and finishers are heavily dependent on direct payments to prop up their income. Last year, direct payments accounted for 45pc of farm gross output and almost 157pc of FFI on 'cattle other' farms.

The average FFI on cattle feeding and finishing farms was less than €10,000 last year and only 10pc of farms in this system had a farm income of €25,000 or more in 2010.

Indo Farming