Large crowds of farmers gathered at the organic suckler farm of James Beirne in Co. Roscommon on Wednesday (April 5), for a Teagasc organic farm walk that discussed the profitability of both conventional and organic suckler farms.
While some of the crowd were existing organic farmers, the majority of farmers in attendance were conventional suckler farmers who were considering converting to organics.
Some of the main topics of discussion at the event were rush control, securing sufficient fodder, and profitability on organic farm holdings.
James converted his farm to organics in 2022. The farm size is just under 30ha and James keeps 18 suckler cows and one stockbull, with progeny sold as organic store cattle at 18 months of age. The stocking rate on the farm is one livestock unit (LU)/ha.
Grazing has commenced on the farm with weanling cattle let to grass this week to graze off ground that will later be closed for silage.
Profitability
Speaking at the event, Teagasc organics advisor Cathal McAuley said that farmers who convert to organics often do so for a range of reasons, including profitability, lifestyle and environmental reasons.
He said that Teagasc assembled a dataset comparing the profitability of conventional and organic suckler and beef farms.
The Teagasc advisor noted however that the data presented represents a very small dataset of farmers. The data is also from 2022 and does not factor in the substantially higher organic payments available to farmers in 2023.
The table below compares E-Profit Monitors from both organic and conventional suckler and beef farms based on 2022 data:
Physical Data Conventional Organic Financial Data Conventional (€/ha) Organic (€/ha) Number of farms 98 20 Gross output €1,231 €642 Hectares (ha) 35.9 42.9 Total costs €1,258 €624 Livestock units (LU) 48 32 Net profit -€27 €18 Stocking rate
(LU/ha)1.46 0.81 Direct payments €656 €723 Net profit
(including payments)€629 €741 Total farm costs (overall) €40,659 €26,533
While the average organic farm has 50% less output, the costs are also 50% less on the organic farm. The stocking rate is 40% lower on the organic farms too.
As the table above indicates, in 2022, the net profit on the average conventional farm in the dataset before direct payments was -€27/ha ,while the organic farms made an average of €18/ha before payments.
Conclusions
When direct payments are included, the conventional farms in the 2022 dataset had a net profit of €629/ha and the organic farms had €741/ha.
In 2022, organic payments were €220/ha during conversion and €170/ha after that, with no participation payment.
From 2023 onwards, the payment rate for organic farmers in conversion is €300/ha and €250/ha after that, plus a participation payment of €2,000 for the first year and €1,400 every year after that.
Commenting on the findings from the dataset, Cathal McAuley said: “From a net profit including direct payments, the organic farm is making more.
“In the conventional system, you’re spending over €40,000 to lose €27/ha and come out with €629/ha when you take in your payments, so there’s a much higher risk there if beef price reduces.
“In an organic system, you’re spending 40% less. The big message from this is the organic system is an awful lot lower-risk compared to the conventional system.”
It was emphasised at the event that farmers in organics will have less livestock and their soil fertility must be maintained with organic manures sourced only from livestock with access to pasture each year.
“Less work, better lifestyle and more money at the end of the day for yourself,” McAuley said.
It was outlined that organic meal can cost anywhere from €850-1,000/t and the Teagasc advisor warned: “If you go into an organic system and you’re depending on organic meal, that may be an issue.”