Gulf widens between dairy and cattle farming

Dairy farm incomes reached an unprecedented high of €68,887 in 2014, with average family farm incomes rising 6% to €26,974.

The latest annual Teagasc National Farm Survey has confirmed the profitability achieved by dairy farms in recent years. However, it has confirmed a growing gulf between profitable dairy and struggling cattle and sheep farms. Tillage incomes were steady year on year.

The survey showed dairy incomes rising from their 2013 figure of a little over €64,000. Farmer groups note this rise is largely due to increased output, while product prices are falling.

Teagasc says farming is highly reliant on EU direct payments, which average €18,859 per farm. This figure comprised 70% of farm income in general, and more than 100% on cattle and sheep farms.

Thia Hennessy, head of the Teagasc National Farm Survey, said: “The value of farm output decreased in 2014, but farmers benefitted from very good weather conditions as well as a recovery from the fodder crisis in the previous year and the total costs of production were down by 6%. It was a particularly good year for dairy farmers.

“Although milk price declined slightly in 2014, production levels were up and costs of production were down significantly. However, many farmers were penalised for over-quota production in the last year of the milk quota and they will be paying for that through superlevy bills in 2015.”

Cattle-rearing farms saw incomes increase 8%, largely on the back of falling production costs. However, cattle fattening units suffered from lower animal slaughter prices in 2014. The average annual slaughter price was down 11% and income on these farms fell 12% in 2014.

The €26,974 figure is the average income for the full population of approximately 80,000 farms which includes many part-time and small farm holdings.

Income varies considerably by farm size and system with the average income on dairy farms almost €69,000 in 2014 compared to an average of just over €10,000 on cattle- rearing farms. Fewer than 20% of farms earned €50,000 or more, while 40% earned less than €10,000.

IFA president Eddie Downey said any income increases needed to be set against the hardship of the 2013 fodder crisis, a year in which farmers endured huge increases in feed and fertiliser expenditure. He also raised concerns for cattle finishers and tillage farmers.

“We see that incomes for cattle finishers was back significantly in 2014, due to a fall of over 10% in finished cattle prices. While cattle rearing and sheep farms experienced an increase in prices last year, average incomes in these sectors remain very low, ranging from €10,000 to €15,000.

“Tillage farmers experienced no real change in income, despite a very strong year for growth, as prices fell; 2015 is looking to be a very difficult year for our tillage farmers for the third year running as prices have weakened and yield prospects are average.”

ICSA president Patrick Kent has said that, while he welcomes the slight increase in suckler and sheep farm incomes, these continue to compare pitifully with incomes in the dairy sector.

Beef finishing enterprises, most worryingly, saw a continued drop in their incomes, down 12% to €13,884, noted Mr Kent. “Compare these figures to the €68,887 average on dairy farms, and the contrast is stark,” he said.



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