Dairy farmer numbers to decline but holdings to grow

THE decline in the number of dairy farmers is set to accelerate, but those who intend to remain plan to substantially increase the size of their business, a Teagasc survey reveals.

Around 15% of dairy farmers said they would exit milk production over the next two years. A further 32% said they would exit over the following 3-10 years. This is in line with earlier analysis by Teagasc economists, which projected a drop in the number of dairy farmers from 26,500 at present to 18,000 by 2012.

However, the survey findings published yesterday show three out of every five dairy farmers intending to remain in production plan to increase their herd size by an average of 20 cows.

In beef production, the Teagasc survey shows almost 50% of producers plan to retain their existing stock numbers.

Around 10% plan to increase numbers while close on 40% said they would reduce numbers. The overall drop in beef numbers would be around 10%.

The survey results also indicate a drop in sheep, the largest being in hill stock, where farmers say they will reduce numbers by 40%.

Farm opinion on the impact of CAP reform on their future income is divided equally, according to the survey, which was carried out among a representative sample of 1,200 farmers.

It reveals 42% feel the decoupling of farm payments from production will have no impact on their income. It says 40% expect their income to decline while 10% expect an increase.

Dairy farmers are most pessimistic about income prospects, with almost two- thirds indicating they expect the recent EU agreement to result in a drop in income.

Head of the Teagasc National Farm Survey Liam Connolly said despite the divided opinion on the impact of the reforms on income, the vast majority of farmers fully support the new policy direction.

Of those surveyed 85% said they were in favour of complete decoupling of payments from production.

Meanwhile, farmers involved in the major enterprises had mixed fortunes in 2003, according to the survey findings.

Commenting on a Central Statistic Office estimate of a 2.2% increase in overall farm income this year, Mr Connolly said while beef and tillage farmers experienced some upturn, dairy, sheep and pig producers all suffered a drop.

The trends for 2004 pointed to a small drop in incomes due to declining output and rising costs, he told the Teagasc Situation and Outlook in Agriculture conference in Dublin.