Family farm incomes fell 15 per cent, Teagasc survey

The family farm income across Ireland’s 79,103 farms fell by 15 per cent in 2012 to €25,479 on average. This is according to the Teagasc National Farm Survey for 2012. Its full results were published this week.

It noted average direct payment per farm was €20,802 in 2012, a one per cent reduction on the 2011 figure.

In terms of sectors, it found on dairy farms the average farm income decreased by 27 per cent in 2012. On cattle farms, the farm income decreased by 7 per cent. On sheep farms, income declined by 4 per cent during. On tillage farms income was more or less unchanged, the national survey found.

According to Teagasc economist Anne Kinsella, the inclement weather was the big news story of 2012.

“A very wet summer followed by the early onset of winter negatively affected yields and feed usage. The situation was worst in the south and south east with summer rainfall up significantly. Production costs increased by 9 per cent while feed costs increased most significantly. Expenditure concentrate feed was up 31 per cent and bulky feed up 30 per cent on average.”

Among the main concerns highlighted in the survey was the economic pressure on single suckling farm enterprises, she said.

Despite relatively strong cattle prices in 2012, gross output on suckling farms was still, on average, insufficient to cover total production cost, she said.

“Total direct and fixed costs of production increased by 12 per cent and 13 per cent respectively, with expenditure on concentrate feed increasing by 20 per cent. On average net margins were down 18 per cent in 2012 to -€46.”

In addition, the Teagasc economist noted a significant shift in off-farm employment for the  sector that is of considerable concern.

The number of farms where either the farm holder or the spouse had off farm employment peaked for all farms in 2006, at 59 per cent but had declined to 28 per cent in 2012.

“Single suckling farms rely hugely on direct payments and off-farm employment. The national survey shows that since 2006 off-farm employment for the farm holder on cattle rearing farms has decreased from 53 per cent to 40 per cent this year (for both farmer and spouse declined from 64 per cent to 54 per cent from 2006 to 2012).

This is a worrying trend in terms of the reliance of these low-farm income single suckling farms on other sources of income, especially when one also takes into account the decline in both the REPS payments and in the suckler cow welfare payment year-on-year. Approximately 40 per cent of cattle rearing farms were classified as vulnerable in 2012, ie the farm is not economically viable and neither the farmer nor spouse has off farm income”

Among the other highlights were:

* Expenditure on concentrate feed was up 31 per cent and bulky feed up 30 per cent on average.

* Cattle prices were strong, with the average finished cattle price increasing 15 per cent in 2012.

* Milk prices declined by 9 per cent from the high levels in 2011.

* Lamb prices decreased 7 per cent.

* Value of winter wheat harvest was down 18 per cent.

* Variability in farm incomes, in 2012 15,029 produced a family farm income of less than €5,000.

* Average size of farm was 47 hectares and the average income €541 per hectare.

* Average borrowings per farm in 2012 was €23,843, an increase of one per cent since 2011

* Average borrowing for dairy farmer €67,708 compared to €8,391 on cattle rearing farms

* Approximately 15,500 specialist dairy farms with an average FFI of €49,290, a 27 per cent decrease on 2011.

* Approximately 17,800 cattle rearing farms with average FFI of €12,186 in 2012, a five per cent reduction on 2011.

* Approximately 12,500 sheep farms average FFI of €18,243 in 2012, a four per cent decline.

* Approximately 6,500 tillage farms with an average FFI of €37,151.

The survey is published annually and is celebrating its 40th anniversary this year. One of its main aims is to determine the financial situation on farms across Ireland, in terms of measuring gross output, costs, income, investment and level of indebtedness. It also provides a database of farm financial, technical and demographic information, fulfilling Irelands obligation to provide data to the European Commission. In addition, it is key resource in measuring best farm management practices.

A full copy of the report is available here.

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