SCSI/Teagasc report: €381/ha gross margin for suckling enterprises

In 2018, the average gross margin per hectare earned on single suckling enterprises is estimated to have been €381/ha, a 19% decrease on the 2017 level.

This is according to the Society of Chartered Surveyors Ireland/Teagasc Agricultural Land Market Review and Outlook 2019.

The report also states that in 2018, the average gross margin per hectare earned on cattle finishing enterprises is estimated to be €428/ha in 2018, 11% down on the 2017 level.

It noted that beef farming remains the largest agricultural enterprise activity in Ireland in terms of land use and farm numbers and occupies more than two thirds of the grassland area in Ireland.

In 2018, the report noted that weanling prices declined by 3% while prices for older store cattle declined less significantly.

When assessed over the year as a whole, finished cattle prices remained largely unchanged relative to 2017.

Movements in prices for beef animals varied over the course of 2018. For both young cattle and finished cattle, prices in the first half of 2018 exceeded those in the first half of 2017.

In 2018, the onset of the summer drought in North Western Europe and low milk prices led to a significant increase in the volume of cows slaughtered in the EU. This increase in beef production contributed to a sizeable decrease in beef prices in the second half of the year.

The direct costs of production increased for cattle farms in 2018 mainly due to higher feed usage.

The increase in costs of production contributed to a significant decrease in average gross margins per hectare for cattle finishing enterprises and a more appreciable decrease in average gross margins in the case of single suckling enterprises.