Average farm incomes fall 15% on adverse weather conditions

Teagasc annual review finds farm incomes fell this year but conditions better for 2019

Dairy farmers were the worst affected this year, witnessing incomes slip 22 per cent. Photograph: iStock

Dairy farmers were the worst affected this year, witnessing incomes slip 22 per cent. Photograph: iStock

 

Average farm incomes fell 15 per cent this year as adverse weather blighted agricultural production, a review from the State’s agri-food research and development body has found.

Farm incomes across almost all categories fell this year with weighted average earnings down €4,885 to €25,894, according to estimates from Teagasc, the agricultural and food development authority.

However, tillage farmers increased earnings 6 per cent helped by a substantial increase in cereal and straw prices due to limited supplies.

Adverse weather conditions in the early part of 2018 increased production costs due to delayed “turn out” of animals to grass. Subsequently, the summer drought led to a collapse in grass growth and meant farmers had to use additional concentrate feeding.

While there were fears of a winter fodder shortage, autumn weather conditions were highly favourable to grass growth, Teagasc said.

Dairy farmers were the worst affected this year, witnessing incomes slip 22 per cent. Cattle rearing incomes dropped 19 per cent while sheep farmers saw income fall 1 per cent.

“Dairy, beef and sheep farms saw a substantial increase in their expenditure on feed in 2018. On the typical dairy farm feed expenditure is estimated to have increased by about 50 per cent,” the Co Carlow headquartered semi-State agency said.

‘Severe drop’

Unlike other sectors, pig farmers didn’t face challenges as a result of poor weather but margins were squeezed by a “severe drop” in prig prices while feed costs rose. Pig prices are expected to recover next year, however.

But on the whole, the likelihood is that few farmers will see incomes return to 2017 levels next year, according to Teagasc’s forecasts. Indeed, tillage farmers will see incomes fall back assuming weather returns to normal.

“Better weather should lead to a recovery in yields in the cereals sector, but the outlook for tillage margins will depend on harvest prices in 2019,” Teagasc explained in a statement.

Nevertheless, incomes are expected to increase 8 per cent in 2019 compared to this year, particularly on dairy and drystock farms. Dairy farm incomes are forecast to recover 10 per cent to €73,863 while cattle rearing incomes are expected to increase 15 per cent to €11,670.

Although any reversal of fortunes in the agri-business sector depends entirely on the Brexit regime that emerges, with a transition agreement noted as being “critical” to the prospects for farmers next year, especially considering the UK remains Ireland’s most important beef market.