Beef incomes set to languish in 2019 – Teagasc mid-year report

Beef farmers are continuing to struggle in terms of income in 2019, with persistently low output prices keeping pressure on margins, according to the Teagasc Mid-Year Outlook Report.

This is despite a drop in expenditure on the input side, caused by the more stable weather conditions this year compared to last.

There is a similar story in the sheep sector, with the reduction in feed expenses not being enough to offset the fall in lamb prices.

In better news, the dairy industry is expected to “rebound” in 2019, after a fall in incomes in 2018, largely due to the weather.

Dairy farmers are making savings on feed this year, which is accompanied by a “strong growth in milk production”.

The increase in production is largely down to increased yields, with only a marginal increase in dairy cow numbers. Teagasc is predicting that Irish milk production could increase in volume by 10% this year.

All this should result in a 20% increase in dairy farm incomes for 2019, for an average farm income of €74,000.

On the beef side, Teagasc highlights that there will be some easing to low incomes by the recently announced Beef Emergency Aid Measure (BEAM) scheme, which will see up to €100 million paid out to beef and suckler farmers.

Respectively, this should see incomes increasing 37% and 14% for finishers and suckler farmers. Without this exceptional aid, margins would only increase 13% and 4% respectively.

On lambs, prices are running at 9% lower than the 2018 level, with Teagasc predicting a negative impact on margins, and a 4% fall in incomes for sheep farmers this year.

Turning to the tillage sector, Teagasc forecasts a significant increase in yields for 2019, resulting from improved production conditions. However, this could be accompanied by a 20% fall in tillage incomes, to below €35,000 per farm on average, according to Teagasc economists.

This is because the sector is experiencing reversed trends from 2018 – increased yields but a reduction in harvest price of 30% relative to 2018. This, combined with price inflation, will lead to a drop in cereal margins for 2019.

The Teagasc Mid-Year Outlook Report is available to be viewed here.