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Friday 17 August 2018

Dairy income soars as beef and sheep farms survive on support

Third of milk farmers earn €100,000 while other sectors dip to €10,000 or less

IFA president Joe Healy warns about low levels of income. Picture: Karen Morgan
IFA president Joe Healy warns about low levels of income. Picture: Karen Morgan
Ciaran Moran

Ciaran Moran

The income gap between dairy and other farmers continues to widen with new Teagasc figures showing almost one-third of dairy farmers earned more than €100,000 in 2017.

On the other hand, approximately half of all beef farms earned a farm income of €10,000 or less in 2017.

In the case of sheep farms, average income increased by about €1,000 to €17,000 last year.

The average income on tillage farms also increased from the €31,000 in 2016 to €37,200 in 2017.

The figures were released by Teagasc from preliminary results of its National Farm Survey for 2017, detailing the performance of various farm types and the associated level of farm income.

The survey showed a dramatic increase in income on dairy farms driven by a very substantial jump in the farm price of milk and continuing growth in the volume of milk produced.

The average income on dairy farms is estimated to have increased from just over €52,000 in 2016, to over €86,000 in 2017.

Over 70pc of dairy farms achieved an income in excess of €50,000 in 2017.

On-farm investment was also highest on dairy farms, at an average of €25,118. This is up 53pc compared with 2016 levels.

Borrowings on dairy farms declined by 2pc in 2017 despite a 53pc increase in investment.

Of those dairy farms with debt, the average figure was €100,076.

The positive picture in the dairy sector was not reflected in other farming enterprises last year which continue to be heavily reliant on EU and Government support payments.

While tillage farms received the highest direct payments at €23,994 on average in 2017, it accounted for 65pc of farm income on those farms.

On cattle rearing farms, although their direct payments are lowest on at €14,381, their overall contribution to income is highest at 113pc.

In general, income continues to be highly reliant on direct payments.

In 2017 the average total payment received was €17,672 per farm, and this accounted for 75pc of average income.

Pressures

Teagasc also noted that some of the cost pressures associated with the early onset of winter conditions last year were also evident in the survey results, with expenditures on feed elevated relative to what would be considered as normal.

It highlighted, however, that while the issue of fodder shortage had been prominent during the spring, most of its financial impact on farms will be felt on incomes for 2018 rather than for 2017.

IFA president Joe Healy said the increase in average income for 2017 to €31,300 came off the back of a difficult year in 2016.

"Farming on the whole remains a low-income activity, with average earnings well below the average industrial wage," he said.

Mr Healy said the 2017 figure was influenced by the positive performance from dairy farms, the vast majority of which were full time with higher volumes and better prices after a difficult year in 2016.

"It also illustrates the extreme income volatility which challenges dairy farmers," he said.

ICSA president Patrick Kent has said the static income figures for drystock farmers revealed in the Teagasc Farm Survey for 2017 demonstrates where CAP supports need to be directed.


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