The average farm debt stood at €72,809 in 2022, according to a new survey published today (Monday, June 12).
The Teagasc National Farm Survey 2022 states that 61% of the country’s 85,806 farms have no farm business-related debt.
Two thirds of Ireland’s 15,319 dairy farms had related borrowings, compared to just over one quarter of cattle rearing and one third of ‘cattle other’ farms.
32% of sheep farms had outstanding farm debt in 2022, while the figure was 40% for tillage farms.
When farms without debt are excluded, the average dairy farm debt in 2022 declined by 8% year-on-year to €127,477.
The average debt on cattle rearing farms with loans declined by 9% to €27,435, with the equivalent figure on cattle other farms up 7% to €50,015.
Debt on sheep farms rose to €34,634, while the average debt on tillage farms with loans also increased substantially in 2022 to €78,375.
Debt
According to Teagasc, the majority of farm-related debt (75%) was classified as medium- to long-term in 2022.
A further 18% related to hired purchase or leasing and the remaining 7% was considered to be short-term debt such as overdrafts.
On average, 77% of dairy farm debt was medium- to long-term, with the comparative figure on cattle rearing and cattle other farms 80% and 70% respectively. The figure was lower on sheep farms at 61%.
Only half of the average tillage farm debt was classified as medium- to long-term, with 49% related to leasing or hired purchase and the other 2% reported to be short-term.
The survey shows that dairy farms were more likely to have debt than other farm types, and were also more likely to have substantially higher absolute levels of debt.
Due to their higher income levels compared to other farming enterprises, the average debt to income ratio on dairy farms improved year-on-year at 0.77.
The average debt to income ratio also improved on tillage farms in 2022, at 0.69.
Although only 27% of cattle rearing farms reported having debt in 2022, the debt to income ratio of those with borrowings was relatively high compared to other farm systems, at 2.14.
The debt to income ratio on sheep farms was at 1.42 in 2022.
Survey
The Teagasc National Farm Survey also shows that gross new investment on Irish farms dropped by 11% in 2022, after several years of “substantial growth”.
Despite this, over €1.35 billion was spent on on-farm investments in 2022; over half of the total investment was on dairy farms.
Investment on dairy farms remained highest at an average spend of €46,005/farm in 2022.
On the average cattle rearing farm, investment expenditure was €5,085/farm. The equivalent figures on cattle other and sheep farms were €6,904/farm and €8,543/farm respectively.
Investment on tillage farms also declined in 2022, down 24% year-on-year to an average of €21,997/farm.
Machinery-related investment accounted for just over half of total investment on the average dairy farm (at just over €24,000) and three quarters on the average tillage farm (at just over €16,500).
On drystock farms, machinery-related investment (between approximately €3,500-6,000) on average, represented between 60-70% of total investment on those farms in 2022.
Building investment averaged €18,500 on dairy farms in 2022.
Expenditure relating to land improvement remained relatively low in 2022, at close to €3,000 on the average dairy farm and between €500-1,000 across the other systems.