The agricultural operating surplus fell by 39%, or €1.9 billion, to €2.9 billion last year, according to the Output, Input and Income in Agriculture – Final Estimate 2023 by the Central Statistics Office (CSO).
However, when the impact of a 97% increase in net interest payments (+ €66 million) and a 15% rise in land rental costs (+ €81 million) are factored in, the fall in agricultural entrepreneurial income was 49%, or €2.0 billion, to €2.1 billion.
With the value of many agricultural outputs down in 2023, most notably milk and cereals, the value of agricultural output at basic prices dropped by 13%, or €1.6 billion, to €11.3 billion last year, according to the CSO.
Final CSO estimates for 2023 published today (Thursday, August 29), show that the value of milk decreased by 30%, or €1.5 billion, to €3.5 billion driven by prices being 26% lower and volumes contracting by 5%.
Output costs
The area planted under cereals last year contracted by 6%. Due to reduced yields and prices decreasing by an average of 30%, the value of cereals reduced by 52%, or €377 million, to €344 million in 2023, CSO figures show.
Potato volumes were down by 9%, however, a 43% increase in prices saw the value of potato production grow by €50 million, or 30%, to €220 million. The value of fresh vegetables grew by €13 million, or 5%, last year due to prices rising by an average of 7%.
The value of livestock, at €4.6 billion, rose by €7 million last year. While the volume of cattle production fell by 4%, with prices up by 3%, the overall impact on cattle values was a reduction of €13 million to €3.0 billion last year.
Sheep farmers saw a significant decline in the value of their output, which fell by €33 million, or 9%, last year to €345 million due to weaker prices (-3%) and lower volumes (-6%), according to CSO estimates for 2023.
Despite volumes contracting by 10%, a 19% increase in prices saw the value of pig production increase by €46 million, or 7%, to €668 million. The value of poultry grew by €17 million to €222 million due to both volumes and prices each rising by 4%.
Input costs
While the cost of most farm inputs grew, intermediate consumption costs fell by 2%, or €127 million, to €7.8 billion. This drop was mainly due to the cost of fertilisers falling by €400 million to €817 million due to 13% lower volumes and a 22% drop in prices.
While prices for seeds were up by just 2%, volumes rose sharply by 26% and as a result, expenditure grew by €28 million to €126 million last year. A 12% rise in prices for forage plants added an additional €160 million to their value, which rose to €1.5 billion.
Veterinary expenses increased by 11% to €390 million last year, and expenditure on crop protection products grew by €11 million. Expenditure on feeding stuffs fell by 1% to €2.3 billion last year, due to lower volumes used.
The cost of maintenance and repairs increased by €31 million, or 5%, to €634 million last year, while the cost of contract work rose by 4% to €597 million, with higher prices accounting for 3% of this increase, according to the CSO.
Agricultural operating surplus
Commenting on the release, statistician in the agriculture accounts and production section, Mairead Griffin said the final estimate for 2023 shows a “steeper” drop in agricultural income than was previously estimated.
“While a fall of €1.6bn in the value of agricultural output at basic prices was less than our earlier calculation, at €127m so too was the decrease in intermediate consumption costs.
“Our final estimate for 2023 is that agricultural operating surplus fell by 39% to €2.9bn, while entrepreneurial Income, which factors in the cost of interest payments and land rent on agricultural income, fell by 49% to €2.1bn,” Griffin said.
The cost of Financial Intermediation Services Indirectly Measured (FISIM), which is the revenue from the margin on lending and borrowing by financial intermediaries, declined by 57% or €43 million last year, figures show.
However, the CSO notes that in relation to financial costs, the reduction in FISIM charges was outweighed by the rise in net interest payments, which almost doubled, costing farmers an additional €66 million in 2023.