Farm incomes in Republic rise by 9% despite pandemic

Annual survey by Teagasc shows farmers benefitted from lower input prices in 2020

Average incomes in the dairy sector rose by 13 per cent on foot of lower production costs and increased milk volumes. Photograph: Sean Gallup/Getty Images

Average incomes in the dairy sector rose by 13 per cent on foot of lower production costs and increased milk volumes. Photograph: Sean Gallup/Getty Images

 

Farm incomes in the Republic rose last year despite the pandemic and a major fall-off in demand from the food service industry, according to agri-research agency Teagasc.

The rise was also fuelled by reduced production costs as farm input prices fell.

Teagasc’s latest annual farm income survey suggests the average family farm income in the Republic rose by 9 per cent to €25,662 in 2020.

The average figure includes many small, part-time beef and cattle farmers and is therefore low in comparison with average wages in other sectors.

It also masks the bigger incomes being generated on the dairy side, traditionally the most profitable farming practice, where average incomes rose by 13 per cent to €74,236 last year on foot of lower production costs and increased milk volumes.

“Production costs were lower as key farm input prices fell in 2020. It had been initially feared that Covid-19 would significantly damage food demand, particularly for beef, due to food service closure and lockdown measures in Ireland and in overseas markets,” Teagasc said. “However, this was effectively offset by growth in the consumption of food at home.

“A Brexit trade deal was eventually agreed, but the protracted negotiations created additional uncertainty, impacting beef prices in particular,” it added.

Across the key output categories, lamb prices performed best, recording a 13 per cent increase in 2020 compared with 2019. Beef and dairy farmers, meanwhile, benefitted from higher cattle and milk prices while cereal prices were up significantly, reflecting market supply and demand conditions, Teagasc said.

As a result, there were increases for dairy, sheep and beef farmers, while incomes for cattle rearing and tillage farmers experienced small annual falls compared to 2019.

Sheep farmers benefitted from lower production costs and higher lamb prices with average incomes increasing by 24 per cent to €18,383 in 2020, while tillage farmers saw incomes fall marginally by 1 per cent to €32,525 on foot of a drop in global cereal prices.

Incomes in the “cattle rearing” sector, which comprises farms that are mainly specialised in suckler beef production, were unchaged at €9,037 while the incomes of beef finishing farms were up 8 per cent at €14,813 on higher output prices.

The survey show dairy farm debt remained similar to the 2019 figure with an average of €112,476, excluding farms that had zero debt. Dairy farmers have borrowed heavily to invest in their operations since the lifting of EU milk quotas in 2015. The sector has also seen a large number of new entrants.