Almost 60% of dairy farms had debts averaging €99,058 last year, a preliminary estimate of Teagasc’s National Farm Survey results show.
Across the board, a large majority of farms – close to 65% – had no farm business related debt, the preliminary results revealed; but this does vary considerably across different farm systems, Teagasc added.
The level of debt across dairy farms in 2016 could be offset by the fact that 36% of on-farm investment last year took place on dairy farms.
A total of €687 million was spent on (gross) new investment in farming last year; this represented a fall of 13% on the previous year, according to Teagasc.
With regard to (gross) new investment, the average spend per farm equalled €8,205 in 2016. Investment was highest on dairy farms, at an average of €15,713, the preliminary results of the National Farm Survey revealed.
Dairy farms accounted for over €245 million of the total on-farm investment last year.
Debts on other farm enterprises
A closer look at other farm enterprises show that 26% of cattle-rearing farms had borrowings in 2016, while 31% of what Teagasc defines as ‘cattle other’ farms had borrowings and some 23% of sheep farms were also in debt last year.
Meanwhile, a total of 34% of tillage farms had borrowings last year, the preliminary results showed.
Across the 35% of farms that had borrowings last year, the average debt was €63,764; this represented a 3% increase year-on-year. On dairy and tillage farms the average debt was much higher, at €99,058 and €80,590 respectively.
The average debt on sheep farms stood at €54,517, on cattle-rearing farms the average debt equated to €28,360 and the average debt on ‘cattle other’ farms amounted to €39,763, according to Teagasc.
Despite dairy farms having the highest level of borrowings in 2016, their debt-to-income ratio stood at 1.75.
The figure was 2.08 on sheep farms and 1.97 on ‘cattle other’ farms; lower debt-to-income ratios were reported on cattle-rearing farms (1.55) and tillage farms (1.62) last year.
The average across all farm enterprises equated to a score slightly higher than the one seen on dairy farms.