Border region – strongest recovery in 2019 agricultural operating surplus

The border region had the strongest recovery in agricultural operating surplus in 2019 according to the latest data from the Central Statistics Office (CSO).

On a national basis, operating surplus for the agricultural sector increased by €110.7 million (+3.8%) in 2019, a recovery of 23.2% of the €477.5 million decrease experienced in 2018.

This was primarily the result of reduced intermediate consumption costs during 2019 rather than output growth.

Most of the items of intermediate consumption, such as expenditure on fertilisers; crop protection products; energy and lubricants; maintenance and repairs; veterinary expenses and expenditure on other goods and services, are allocated based on the total expenditures in each region as measured by the National Farm Survey conducted annually by Teagasc.

The drought of 2018 had a significant impact on crop producers, with substantial price increases resulting from lower output volumes and increased demand.

When these price increases were largely reversed in 2019, the overall impact on crop producers was reduced output values.

The most notable exception to this was cereal production, where the return to more suitable weather conditions resulted in output growth that significantly outweighed the impact of reduced prices.

The reduction in crop prices combined with improved weather conditions had a positive impact on livestock and milk producers who profited from the reduced cost of their two main inputs – forage plants and feeding stuffs.

Regional analysis – border area

The border region had the largest recovery of its operating surplus in 2019. With pig production responsible for 12.4% of the value of its agricultural output at basic prices, the largest proportion of all regions; it benefited most from the increased pig prices.

As a result, the value of its pig production increased by €32.4 million (+31.1%). This was the main factor that contributed to it being the only region where the value of livestock grew in 2019, increasing by €28.6 million (+5.2%).

With little growth in the value of milk production, the value of livestock products increased by just €1.5 million (+0.7%) in the border region.

Crops, which contributed 20.2% to the value of its agricultural output, decreased in value by €28.3 million.

This was due to the large reduction in the value of forage plants, which fell by €28.5 million.

Other regions

This south-west region had the highest dependency on dairy farming in 2019, with 46.1% of the value of its agricultural output derived from milk.

The value of its milk output decreased by €11.4 million (-1.4%), making it the only region that experienced a fall in the value of milk production.

In the Dublin – mid-east region – with its large dependency on crop production which accounted for 38.7% of the value of its agricultural output compared with a national average of 22.3% – this region was the only one to experience an actual decrease in operating surplus in 2019, which fell by €20.0 million (-5.4%).

The value of livestock in the Dublin and mid-east region fell by €27.5 million (-6.5%) with the value of horse and cattle production falling by €18.9 million and €14.7 million respectively.

The operating surplus in the midland region increased by €7.8 million (+4.7%) which represents a 16% recovery of the €48.5 million reduction that occurred in 2018.

With pig farming responsible for 11.3% of the value of its agricultural output, the second highest in the country, this region benefitted significantly from increased pig prices.

The south-east region followed the same trend as most other regions with an increase of €8.3 million (+1.9%) in its operating surplus.

The value of its livestock production fell by €27.3 million (-6.0%) while dairy farmers experienced some growth, with the value of milk increasing by €11.3 million (+2.4%).

Image source: CSO

In the mid-west, the recovery of operating surplus in 2019 was relatively small. While 2018 saw operating surplus decrease by €99.3 million, just €3.2 million of this was recovered in 2019 when operating surplus increased by 0.6%.

With growth of €20.0 million (+5.1%) in operating surplus in 2019, the west recovered a third of the €59.9 million reduction in operating surplus that it suffered in 2018.

As pig production accounted for just 1.9% of the value of its agricultural output in 2019, an increase of 24.8% in its value amounted to just €3.2 million. With the value of cattle falling by €9.2 million (-2.7%), the overall value of livestock fell by €4.3 million (-0.9%).

The value of milk production in the west increased by €8.8 million (+8.4%) in 2019.

Crops, which represented 19.2% of the region’s agricultural output, fell in value by €34.7 million (-18.0%), almost all of which can be attributed to a reduction in the value of forage plants.