Agricultural income rises by 2.2% in 2003
A Central Statistics Office (CSO) provisional estimate shows that agricultural income in 2003 increased by 2.2% on the previous year.
Cattle value output increased by 5.5% or €64m. This was largely due to an increase in slaughterings in 2003 over 2002.
The value of milk output also increased by 0.6% or €9m. There was an increase in the volume of milk production but a decrease in the milk price.
In the pig sector, the value of output decreased by 8.9% or €27m. A decrease in the pig price in 2003 of about 4.4% and a decrease in slaughterings in 2003 largely accounted for this decline.
The value of output in the sheep sector decreased by 6.0% or €12m, largely due to a 4.0% decline in slaughterings.
Cereals output value increased by 22.8% or €32m. An increase in volume of 7.0%, coupled with an increase in price of almost 15%, account for this increase.
The value of feeding stuffs decreased by 5.3% or €50m. However, the value of fertilisers increased by 8.1% or €28m, largely due to a 4.4% increase in the volume consumed.
Net subsidies decreased by 2.2% or €35m. In 2002, these represented 65.8% of operating surplus. In 2003, it is estimated that net subsidies represent 63.0% of operating surplus.
Economic analysis by Teagasc experts of the performance of farming in 2003 showed the extent of the mixed fortunes for those involved in the major enterprises. Liam Connolly said that while beef and tillage farmers experienced some upturn in margins, dairy, sheep and pig producers all suffered a drop.
Mr Connolly said trends for 2004 pointed to a small drop in incomes due to declining output and rising costs.
In the dairy sector, Billy Fingleton said further slippage in milk prices contributed to a decline of about 2% in margins from dairy farming in 2003.
This followed a drop of 20% in margins in 2002, he said, predicting that milk prices will fall by about 4% in 2004.
Mr Fingleton said while the introduction of EU compensatory payments will offset the price drop, a decline in calf prices combined with cost increases will result in continuing pressure on margins in dairy farming.
Liam Dunne said margins from beef increased by around 8% on average, due to a small reduction in costs and additional revenue from higher slaughterings and direct payments. The prospects for 2004 point to a drop in margins of around €100 per hectare (€40/acre).
Tillage farmers experienced a substantial improvement on the very poor performance in 2002.
Fiona Thorne said the margins for the two major cereal crops, spring barley and winter wheat, were up by 44% and 25% respectively on 2002.
Increased yields and prices resulted in an increase in margins from sugar beet while lower prices led to a drop in margins from potato growing.
“The indications for 2004 are for some drop in margins from grain growing. However, this will depend greatly on weather conditions in the major international grain growing regions. The margins from sugar beet and potatoes are forecast to increase, primarily due to increases in yields,” she said.
Teagasc chief adviser on pigs, Michael Martin, said the past year brought further difficulty for producers. Lower prices and increased cost resulted in a decline of around 5% in margins.
While overall prospects for pig prices in 2004 are reasonably good, escalating feed costs will severely curtail any increase in margins leading to a further difficult year.
Assessing the performance of the sheep sector, Mr Connolly said the 10-year cycle of decline in numbers was arrested in 2003 with a small increase in the national breeding flock.
Higher production costs and lower lamb prices led to a drop of around 5% in sheep margins last year. The prospects for 2004 are for a further decline in margins.
However, he pointed out that sheep return the second highest margin after dairying and are substantially ahead of margins from either beef or cereal growing.
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