Dairy farm incomes drop by staggering 31% in 2018

Last year, average dairy farm incomes fell by 31% to €61,273 – compared with the 2017 level of €88,829, Teagasc’s National Farm Survey 2018 results have revealed.

The cross-sector income results, published in Dublin this morning, Thursday, May 30, highlight that on dairy farms concentrate feed use increased by almost one-third to over 1,300kg/cow – a situation that was compounded by the extreme and adverse weather conditions experienced throughout the seasons of 2018.

However, across the farm sector as a whole, the average family farm income in 2018 declined by 21% – dropping from €29,774 in 2017 to €23,483.

The extent to which weather had an impact on individual farm incomes last year depended on factors specific to each farm – including: local weather; farm type; soil type; stocking rate; and the mix of winter and spring crops sown.

The authors of the report – namely: Teagasc’s Emma Dillon; Brian Moran; John Lennon; and Trevor Donnellan – outline that good late-season grass growth and an extended silage making campaign “helped to avert” even steeper increases in production costs late in the year and stemmed the erosion in farm incomes.

Cattle Rearing Farms

According to the report, average family farm income on cattle rearing farms dipped to an estimated €8,318 in 2018 – a reduction of 22% on the €10,642 in 2017, with a sharp rise in production costs again highlighted as “the main driver”.

Meanwhile, ‘Cattle Other’ farms – which comprise a range of cattle production systems (e.g. cattle finishers) other than suckler production systems – also experienced an income drop, due to higher input expenditure.

However, the authors say it was not as steep as that which occurred on cattle rearing farms.

Average ‘Cattle Other’ farm income in 2018 was €14,408, a reduction of 11% on the 2017 figure of €16,115.

The report – carried out by the Agricultural Economics and Farm Surveys Department of Teagasc’s Rural Economy Development Programme – found that sheep farms also experienced an income reduction in 2018, with higher than normal levels of feed and fertiliser use.

Average sheep farm income fell from €17,357 in 2017 to €13,769 in 2018, a reduction of 21%.

Tillage boost

Turning to the tillage sector, the results highlight that in 2018, in general, winter-sown crops “fared better” in terms of their yield performance than spring-sown crops.

The authors found that while crop yields on tillage farms were “well-below average trend yields”, farmers benefited from “a large jump” in harvest prices in 2018 relative to the previous year.

In spite of the low yields, this price increase was large enough to boost the average income on tillage farms in 2018, which was €42,678 – an increase of 18% on the 2017 figure of €36,048.

While the authors highlight that the average family farm income in 2018 declined by 21%, it is also stated that the average on individual farm systems “continues to vary greatly”.