Farmers hit by 'historic' income drop due to 2018's bad weather

Cattle eating silage on Hook Head during the drought in summer 2018
Cattle eating silage on Hook Head during the drought in summer 2018
Concern: Gerry Boyle called the income drop a historic low
Claire Fox

Claire Fox

A dramatic increase in feed costs in 2018 due to adverse weather led to a 31pc decrease in dairy farm incomes and a "historical" 22pc drop in cattle-­rearing incomes last year, according to the Teagasc National Farm Survey.

Storm Emma swathed the country snowfall in March last year, followed swiftly by an extraordinarily dry summer, weather events that severely affected farm incomes.

Dairy farms incurred the largest income reductions, with average dairy farm income falling by 31pc to €61,273, compared with the 2017 level of €88,829. This is mainly due to concentrate feed use, which increased by almost one-third to over 1,300kg per cow.

Average family farm income on cattle-rearing farms dipped to an estimated €8,318 in 2018, a reduction of 22pc on the €10,642 in 2017, with a sharp rise in production costs the main driver.

Teagasc director Gerry Boyle noted that it was a "historically low income" drop for cattle-rearing farmers and added that there would be an inevitable reduction in suckler cow numbers over the coming years on the back of dairy expansion.

Meanwhile, Teagasc economist Emma Dillon said she believed cattle incomes for 2019 would be static but views the outlook for dairy as more positive.

Dairy Farmer Patrick Murphy celebrates the arrival of rain at his dairy farm at Timoleague, West Cork. Picture Denis Boyle
Dairy Farmer Patrick Murphy celebrates the arrival of rain at his dairy farm at Timoleague, West Cork. Picture Denis Boyle

"Dairy farm income has been particularly volatile over recent years due to price and weather-induced shocks, so overall for 2019 the weather has been better and milk price is holding up and the outlook in terms of global supply is fairly positive.

She said global trends for dairy product prices were negative but was overall things were positive for the sector. "On cattle rearing, I think it will remain fairly static to be honest," she said.

Sheep farms also experienced an income reduction in 2018, with higher-than-normal levels of feed and fertiliser use. Average sheep farm income fell from €17,357 in 2017 to €13,769 in 2018, a reduction of 21pc.

While crop yields on tillage farms were well below average trend yields, farmers benefited from a large jump in harvest prices in 2018 relative to 2017.

Karol Winters surveys the damage at Winterheights, Taghmon, after sheds collapsed
Karol Winters surveys the damage at Winterheights, Taghmon, after sheds collapsed

In spite of the low yields, this price increase was large enough to boost the average income in tillage farms in 2018, which was €42,678, an increase of 18pc on the 2017 figure of €36,048.

Across the sector as a whole, the average family income in 2018 declined by 21pc dropping from €29,774 in 2017 to €23,483. 

However, the average on individual farm systems continues to vary greatly. 

Despite last year's challenges, new investment on Irish farms was up 9pc mostly on dairy farms with an average of €31,671 per farm. This led to an average level of debt of €118,446, an increase of 10pc on 2017.

However, investment on cattle and sheep farms was down to 19pc and 26pc respectively. Cattle-rearing farms' level of vulnerability also rose to 43pc and sheep to 44pc, compared to just 13pc of dairy and 18pc of tillage operations.

Irish Independent