The average family farm income (FFI) in Ireland increased by 6% in 2020, according to estimates from a new report compiled by economists at Teagasc.
The Teagasc Outlook 2021, Economic Prospects for Agriculture, was published today, Tuesday (December 1), at the annual Teagasc Economic Outlook Conference, which took place online.
A key driver of this 2020 increase was a reduction in animal feed, fertiliser and fuel prices, along with additional subsidy supports for cattle producers to alleviate the negative effects of Covid-19 on the beef market.
There were concerns early in 2020 that Covid-19 restrictions around the world would hinder food trade and lead to a reduction in global food demand. However, the actual impact of the agri-food sector was minimal.
However, the lockdown measures did lead to restrictions on marts, a short-term contraction in beef processing and lower beef prices. Additional support was made available to the Irish beef sector due to the impact this had on farm level cash flow and short term profitability.
On the positive side, Teagasc noted that production conditions for grassland agriculture in 2020 were relatively normal in Ireland, with only small changes in purchased input usage.
Lower input prices led to a reduction in production costs on dairy, beef and sheep farmers in 2020.
By contrast, some Irish cereal producers had to deal with severe adverse weather conditions in 2020, which led to a substantial reduction in cereal yields on some farms, only marginally offset by higher cereal prices.
The average income on dairy farms is estimated to have increased by 5% in 2020, benefitting from lower production costs, stable milk prices and a further increase in milk production.
By contrast, the average income on tillage farms is estimated to have fallen by 11%, largely reflecting a sharp drop in cereal yields in 2020.
This fall in average cereal incomes belies the more significant drop in income in parts of Ireland worst hit by adverse weather conditions at sowing and harvest time.
All beef farms benefitted from lower production costs, but the outcome for cattle rearing farms was better than that for other cattle farms due to the difference in beef price movements for younger and finished cattle.