Farm Ireland

Friday 20 April 2018

Farmers' income at record level but tough year ahead

Aideen Sheehan Consumer Correspondent

FARM incomes are set to fall from the record levels enjoyed last year, farm advisory body Teagasc has said.

Farmers enjoyed a 32pc increase in income last year, up to an average of €24,861, with full-time farmers seeing an increase to €56,000.

Dairy farmers fared best with average income rising 38pc to almost €70,000, and a quarter of them earned more than €100,000 -- though this would include the cost of hiring outside labour to help out.

However, milk prices have already fallen in 2012 from last year's record highs, while many dairy farmers are also facing 'superlevy' bills for producing too much milk under the EU quota system.

And while beef prices have held up well so far, they are also predicted to fall later in the year.

Farmers would have to reckon with increased volatility in the prices they got for their food in coming years, Teagasc said, at the publication of its National Farm Survey 2011 Preliminary Estimates.


While farmers had enjoyed good returns on the back of high world prices for food in 2011, they were also exposed to falling prices.

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"We must stress that this income story is likely to be short-lived owing to commodity prices declining from 2011 year-highs, and they're already declining this year," said report co-author Anne Kinsella.

Milk prices, which rose 15pc in 2011, were already down 2-3c a litre. Beef prices have held up so far, but Teagasc predicts they will fall later in the year.

Beef farmers saw average incomes jump by 50pc to €10,600 last year, but this was from a very low base, while sheep farmers saw incomes rise by 27pc to €17,084 on average.

Grain farmers enjoyed strong prices and yields last year, but this was offset by higher fertiliser and energy costs, which meant their average incomes were relatively unchanged at €35,737.

Farm incomes had become increasingly volatile in recent years because changes to the EU's Common Agricultural Policy meant farmers were less cushioned from changes in price, Teagasc said.

Many farmers did take advantage of last year's record incomes to pay down debt, with a 20pc reduction in the amount they owed to €1.8bn.

Subsidies -- primarily the EU's single-farm payment -- remain crucial to farmers, accounting for 72pc of farm income, or €18,000 each on average.

However, this is down from 97pc in 2009, and it varies widely between sectors, accounting for about a third of the income on dairy farms.

Despite improved prices last year, beef farmers would be operating at a loss if it wasn't for the EU single-farm payment. They would have lost around €2,000 each on average without subsidies keeping them afloat.

Of the country's 100,000 farmers, around 33,000 are full-time commercial operators with incomes averaging €56,000. Around 5,000 farmers earn more than €100,000 a year, but 20,000 earn less than €5,000.

Some 37,000 farms are classed as "economically vulnerable" because incomes are low and neither the farmer nor spouse has an off-farm job to boost earnings.

The remaining 30,000 farms are considered sustainable as long as someone on them has an outside income -- though the numbers who are working off the farm has fallen to under 50pc in the last few years.

The survey uses data from 1,050 farms and is carefully weighted to represent the national picture.

Irish Independent