High yields, low returns: A third of tillage farmers in the red
Nearly one in five tillage farmers (19%) had a margin of less than €250; 13% had a margin of €250 to €500; and 18% had a margin of between €500 and €750.
Analysis of 2024 figures by Teagasc has shown 37% of farmers growing winter wheat achieved net profit margins of more than €750 per hectare, whereas 13% suffered a loss.
Nearly one in five (19%) had a margin of less than €250; 13% had a margin of €250 to €500; and 18% had a margin of between €500 and €750.
But tillage margins were quite poor last year, even with high yields, said Teagasc economist Trevor Donnellan in a recent podcast. “The focus has to be on improving productivity, getting a better output-input ratio.
"There are a lot of uncontrollables in the tillage sector, things like weather, things like world cereal prices, but there are also controllables and trying to address those controllables at the farm level will be at the core of improving productivity in the sector,” said Mr Donnellan.
He said tillage margins are quite low relative to the other main systems of agriculture in Ireland, with some quite negative figures for cereals, oilseeds, and protein crops.
Within the tillage sector, significant differences existed by farm, by crop, and by year.
“The profit margins are negative for about one-third of our tillage farmers, and positive, albeit positive to only a small extent for some of our tillage farmers, and we have one-third whose margins are actually more significant. So, the average doesn't tell all the story,” Mr Donnellan said.
However, addressing the question of the Irish tillage sector's competitiveness relative to the EU average, he said that output-to-input ratios indicate that Ireland remains competitive. Input costs in Ireland are higher, but there are also high yields.
“We're tending to do better than the EU average in that regard. But the important caveat around that is that our farms in Ireland, in Irish agriculture and tillage, tend to be on the smaller side compared to some of our competitors in Europe.
"So, while we mightn’t be doing too badly on a per-unit basis of output, it's the aggregation of all that across farm size that's also important. Scale of operation is an important factor as well that we need to consider,” Mr Donnellan said.
