Tillage farm incomes are set to drop by €14,000 in 2016 compared to last year, Teagasc’s Fiona Thorne has said.

Speaking at the Teagasc National Crops Forum, the Senior Researcher said that the average income on National Farm Survey farms will be in the region of €20,000 this year, down from €34,000 in 2015.

All of this €20,000 figure, she said, will come from farm payments as the average Irish tillage farm will spend at least €2,000 of their basic payments on subsidising production on their farms.

“The current market situation is not good for tillage farmers at present.

They are making a loss from the market place, they will spend about €2,000 of their single farm payment in 2016.

The Teagasc representative also said that there appears to be no signs of the tillage sector improving between now and 2020.

“There isn’t really anything positive, in actual terms, we will be lucky if output prices hold up,” she said.

She also said that input prices are expected to increase by 5% in 2020, yields are estimated to drop by 3% compared to 2015 and will receive 8% lower Basic Payments.

When all of these factors are considered, she said that the average Irish tillage farm will generate an income of €22,000 or €350/ha in 2020.

What can farmers do?

To address the issue of falling farm incomes, Thorne said that farmers should focus on getting better before getting bigger.

Despite the negative outlook for the tillage sector she advised farmers to continue to sow crops, but she also said that they also need to have a handle on their costs, particularly land rental and machinery costs.

She presented figures which showed that ‘bigger isn’t always better’ when it comes to tillage farm incomes as the difference between small and large farm incomes on a €/hectare basis is small.

Tillage farm incomes in 2015:
  • Small farms: €8,726 or €515/ha
  • Medium farms: €30,667 or €543/ha
  • Large farms: €95,144 or €570/ha