The average farm income on sheep farms in 2020 increased by 24% relative to 2019 and amounted to €18,383, figures from the Teagasc National Farm Survey for 2020 reveal.
The overall gross output on sheep farms increased by 6% to €53,030 – driven by a strong improvement in prices due to better market conditions and increased opportunities for Irish lamb exports.
There were 14,322 sheep farms represented in the survey.
A significant finding from the survey was the proportion of farms (almost one-third) earning an average sheep family farm income (FFI) between €20,000 and €50,000 in 2020.
This resulted in a 9% decrease from 2019. Therefore, as a result, some of the lower-income categories (earning less than €5,000) fell by 11% in 2020.
While almost one-quarter reported a sheep income of between €5,000 and €10,000 in 2020 – which was a 7% increase from 2019.
Although, the proportion of farms earning on average between €10,000 and €20,000 declined by 9% to 21% – while those earning above €50,000 increased marginally to 5%.
However, direct payments were down 3% to €18,908, on average, on sheep farms in 2020. This was mainly due to small reductions across Basic Payments, the Green Low-Carbon Agri-Environment Scheme (GLAS) and the Beef Exceptional Aid Measure (BEAM) on the average sheep farm (with a cattle enterprise) last year.
Another factor in the increase in the FFI was a decline in production costs, the survey revealed.
Direct costs fell by 1% to a farm average of €18,058, while overhead costs fell by 3% compared to 2019 and came to €16,589.
Concentrate feed costs fell by 8% to €6,425, while expenditure on bulky feed also decreased by 15% compared to 2019 to €1,022.
Fertiliser expenditure also decreased marginally by 2% to €2,664, on average. Furthermore, contracting charges and veterinary and livestock costs rose by 9% to €2,518 and €3,570 respectively.
Like other farm systems, a decrease in depreciation cost was another important factor in the increase in the average income seen. Machinery depreciation fell by 14% on average. Although machinery operating costs rose by 3%, machinery-related fuel costs were back 17%.
Meanwhile, maintenance costs for buildings and land also increased on the average sheep farm in 2020, up 13% and 26% respectively to approximately €1,000.
On a per-hectare basis, the average gross margin on sheep farms was €793, which is an increase of 17% when compared to the 2019 figure of €669. This included a basic payment of €258, on average.
In 2019, the average-sized sheep farm was 44ha – which was back from 47ha in 2019 -with the average flock size also falling from 133 ewes in 2019 to 129 in 2020.
Check out this article on last year’s farm survey results for 2019 to compare against the findings in this year’s survey.
