Farm incomes drop 12% to average of €21,500 in 2012, says Teagasc

Irish farm incomes have dropped 12% to an average of €21,500 during 2012, according to Teagasc.

Releasing its Outlook 2013 report in Dublin yesterday, Teagasc is predicting a mild recovery next year, but still says this will fall short of the 2011 average of €24,861, which had been a 32% increase on 2010.

However, Teagasc economists indicate that the 2012 average reduction of 12% masks very significant variations in the change in income on individual farms.

Income on dairy farms is estimated to have declined by 27% in 2012 to an average of €50,000. While tillage farms are estimated to have experienced income drops of up to 20% following the poor year for cereal production. By contrast, income on beef farms increased as prices for cattle remained relatively strong throughout the year.

Wet summer weather impacted particularly on farming in southern and eastern regions where dairy and tillage are most prevalent. This had a substantial negative impact on dairy and tillage farm incomes, which fell by a much larger percentage than the national figure, reflecting an average for all farm systems in 2012.

Teagasc’s Agricultural Markets and Farm Incomes review of 2012 and Outlook for 2013 also indicated that prices for beef, pigs and tillage crops all increased in 2012. Improved market and favourable exchange rate movements led to higher farm prices for those enterprises. By contrast, prices for milk, lamb and cereals declined in 2012.

On the cost side, there was a dramatic rise in feed use in grassland agriculture systems in 2012, as a consequence of the unfavourable summer weather which made grazing, fertiliser application and silage-making difficult. Tillage yields in 2012 were also severely depressed due to abnormal weather.

Looking ahead to 2013, average farm incomes should recover but not to the levels experienced in 2011. Even though further increases in fertiliser and fuel expenditure are on the cards in 2013, feed expenditure should decline significantly compared with 2012 due to lower usage.

Prices for milk and pigs are set to rise in 2013, while beef and sheep prices should remain steady. The outlook for cereals prices remains highly dependent on global weather conditions over the next six months.


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