The recently published Teagasc National Farm Survey 2020 Sustainability Report reveals economic differences including profitability between dairy, cattle, sheep and tillage farms.
In general, dairy farms show the strongest economic performance, significantly ahead of all other systems in terms of gross output, gross margin and family farm income on a per hectare basis.
Output, margin and income
The economic productivity of land is measured as gross output/ha of utilised agricultural area (UAA), while profitability (output minus direct costs), is measured in gross margin.
The gross output of dairy farms in 2020 was €3,695/ha on average, while the gross margin increased slightly reaching €1,906/ha. Family farm income on dairy farms was €1,248/ha, according to the report.
Tillage farms were ahead of both, cattle and sheep farms in all three measures with an average gross output and gross margin of €1,696/ha and €756/ha respectively. The average family farm income was €558/ha.
Sheep farms (€18,568/labour unit), and especially cattle farms (€13,888/labour unit), returned significantly lower average income/labour unit in comparison to dairy farms at €55,271/labour unit, and tillage farms at €38,225/labour unit.
The Sustainability Report distinguishes between the labour of farm family members, which is generally unpaid and therefore not classified as a production cost, unlike hired labour.
The average family farm income on cattle farms was at €331/ha in 2020, compared to the average output of €1,327/ha, and the gross margin at€510/ha.
On sheep farms, the average family farm income was at €435/ha in 2020. Gross output for sheep farms was €1,314/ha in 2020, while the average gross margin reached €507/ha, compared to €414/ha in 2019.
Economic viability for cattle farms is low
As stated in the National Farm Survey 2020 Sustainability Report, cattle and sheep farms are most at risk financially.
Only 17% of all cattle farms, and 26% across all sheep farms in the Teagasc survey were defined as economically viable.
In stark contrast, 79% of dairy farms were economically viable in 2020, as well as 65% of tillage farms.