Lower production costs help farm incomes to stabilise, survey finds

Lower production costs saw farm incomes stay relatively stable so far this year, according to the Teagasc Mid-year Outlook for Irish Agriculture 2014.

Teagasc economist Trevor Donnellan said: “Following two high production cost years in 2012 and 2013, Irish farmers are finally now seeing a reduction in their input spending.”

The Teagasc National Farm Survey 2013, published yesterday, showed average income levels on farms remained steady in 2013 at an average of €25,437 per farm. However, the stability in the average income level masks dramatically contrasting fortunes across the different farming enterprises, Teagasc noted.

Gross margins on dairy farms increased in 2013 by 28% to 23c per litre, almost fully reversing the large decline experienced in 2012. In 2013, milk produced per hectare rose 9% while average dairy farm net margin per hectare was up 64%.

The dairy sector’s feed and fertiliser costs were higher in 2013 than in 2012, but the average total 6% extra in fixed costs were more than covered by the strong prices received.

In contrast, cattle finishing enterprises generated a negative net margin of minus €133 per hectare in 2013; 166% higher than the loss incurred in 2012. Total direct production costs were up 18%, due to increases in expenditure on concentrate feeds (up 20%) and pasture/forage costs (up 19%).

Single suckling enterprises also fared badly. On average losses on suckling enterprises were 167% higher in 2013, increasing from minus €46 in 2012, to minus €123 in 2013. Feed costs rose 30% during 2013.

In 2013, a quarter of mid-season lamb enterprises earned a gross margin of less than €300 per hectare while at the opposite end of the distribution, one tenth of farms earned a gross margin of €1,000 or more in 2013.

Yields for cereal producers were significantly lower overall. The top half of spring barley producers had a market-based net margin of €280 per hectare, while the bottom half of producers had a market-based net margin of €190 per hectare.


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