Wide regional range in average debt per cow
The average debt per cow ranges from €368 to €1,337 across the different dairy expansion categories, according to analysis of the Teagasc National Farm Survey results for 2017.
The lowest figure is for farmers which expanded by 10-20% from 2014 to 2017 (after EU quotas were removed). This category is about one fifth of those surveyed, and now averages 62 cows per herd.
About one farm in eight delivered less milk in 2017 than in 2014, and those farms were found to have average debt per cow of €489.
The survey indicates these are now the smallest dairy farms, averaging only 45 cows.
They are the smallest category, the five expanding categories are about equally sized.
About one fifth of herds expanded by less than 10%, and now average 59 cows per herd, with average debt per cow of €687. It’s €869 for herds that expanded by 20-30%, now with 79 cows on average.
It’s €984 for herds that expanded by 30%-50%, which now have 91 cows on average.
The herds that expanded by 50% or more now have 111 cows on average.
The survey indicates that the average dairy farm debt is about €60,000, and 60% of dairy farms have debt. Next highest are tillage farmers averaging about €20,000, which is near the average for all farms. Debts average under €120,000 on cattle and sheep farms.
Across farm systems, almost two-thirds of farms (63%) have no farm business related debt. This figure varies considerably by farm type, with 62% of dairy farms having borrowings in 2017, compared to only 27% of ‘cattle rearing’ farms. About one-third of tillage and ‘cattle other’ farms had borrowings with the figure a little lower (29%) on sheep farms.
Of those dairy farms with debt, the average figure was €101,160. This reflects a 3% increase in borrowings year-on-year, in the context of a doubling of new investment on these farms in 2017. This would indicate that a significant proportion of this investment was financed internally.
Of those tillage farms with debt, the average figure was € 66,859. As expected, debt figures on cattle and sheep farms are much lower, resulting in an average level of debt across farms with borrowings of €58,975.
The majority of the country’s farm-related debt across systems is classed as long-term.
Tillage farms, however, are the exception to this — with 35% of debt relating to hire-purchase and a further 30% classed as short-term.
Although dairy farms have the highest level of borrowings, their debt to income ratio was lowest in 2017 at 1.07 compared to 1.88 on ‘cattle other’ farms and 1.45 on ‘cattle rearing’ farms.
The equivalent figures for sheep and tillage farms are 1.42 and 1.22 respectively.
