The Teagasc National Farm Survey for 2020 has been released, showing a general increase in farm incomes for last year.
The preliminary results show that there were increases for dairy, sheep and beef farmers, while incomes for cattle rearing and tillage farmers saw small decreases compared to 2019.
The preliminary results were published in the National Farm Survey this morning (Monday, July 19) and are representative of over 93,000 farms in Ireland.
Production costs were lower as key farm input prices fell in 2020.
It had been initially feared that Covid-19 would significantly damage food demand, particularly for beef, due to food service closure and lockdown measures in Ireland and in overseas markets.
However, this was effectively off-set by growth in the consumption of food at home. A Brexit trade deal was eventually agreed, but the protracted negotiations created additional uncertainty, impacting beef prices in particular.
In the spring of 2020 there was some significant, but ultimately short-term, disruption to the beef supply chain which saw Irish finished cattle prices decline sharply, Teagasc said.
In spite of these challenges, farm output prices held firm overall in 2020 and a feared fall in farm incomes did not materialise, although some farm systems fared better than others.
Weather conditions in Ireland were generally favourable for grass production in 2020, but difficult planting conditions had a negative impact on Irish cereal crop production, leading to a decline in yields.
Feed prices were lower in 2020. The fall in input prices benefitted farmers through a reduction in their production costs. These cost reductions were sufficient to boost the average income in Irish agriculture in 2020, according to Teagasc.
Across the key outputs categories, lamb prices performed best, recording a 13% increase in 2020 compared with 2019. Beef and dairy farmers benefitted from marginally higher cattle and milk prices in 2020. Cereal prices were up significantly in 2020, reflecting market supply and demand conditions.
National Farm Survey: Sector-by-Sector
(Check out this article on last year’s farm survey results for 2019 for reference.)
Lower dairy system production costs, coupled with a further increase in milk output volume and slightly higher milk prices, resulted in an average dairy farm income of €74,236 in 2020, an increase of 13% on the 2019 level.
The cattle rearing system, which comprises farms that are mainly specialised in suckler beef production, benefitted from marginally lower production costs in 2020. However, the value of output and support payments were also down slightly in 2020.
Overall, the average cattle rearing income of €9,037 in 2020, a very slight decrease of about €150 on the 2019 level.
In the ‘cattle other’ system, which comprises mainly beef finishing farms but also includes farms selling store cattle, production costs also fell in 2020.
While support payments were also lower, the value of farm output increased. In combination, this resulted in an average income of €14,813 in 2020 for the cattle other system, an increase of 8% on the 2019 level.
The sheep system also benefitted from lower production costs in 2020 and also experienced a strong increase in the value of farm output, which was driven by higher lamb prices.
In common with other drystock systems, on average the level of direct payments for sheep farms was down slightly. The average income on sheep farms increased by 24% in 2020 relative to the 2019 level to €18,383 in 2020.
The tillage system experienced poor production conditions in 2020, which led to lower crop yields. In line with other sectors, input prices for tillage farms decreased in 2020.
However, there was also a significant increase in cereal prices in 2020, partially offsetting the impact of the drop in crop yields. The average income on tillage farms fell by 1% in 2020 to €32,525.
Taking account of the income developments across the various farm systems, the average family farm income rose by 9% in Ireland in 2020 to €25,662, Teagasc noted.
The full Teagasc National Farm Survey for 2020 can be viewed here.