Newly released Teagasc estimates indicate that Irish farm income in 2012 averaged €21,500, a drop of 12 percent compared with last year.
However, Teagasc economists indicate that this average reduction masks very significant variations in the change in income on individual farms. Wet summer weather impacted particularly on farming in southern and eastern regions where dairy and tillage are most prevalent. This had a substantial negative impact on dairy and tillage farm incomes which fell by a much larger percentage than the national figure which reflects an average for all farm systems in 2012.
Teagasc presented its Agricultural Markets and Farm Incomes review of 2012 and Outlook for 2013, at a conference in Dublin last week. Prices for beef, pigs and tillage crops all increased in 2012. Improved market conditions and favourable exchange rate movements led to higher farm prices for those enterprises. By contrast, prices for milk, lamb and cereals declined in 2012.
On the cost side there was a dramatic rise in feed use in grassland agriculture systems in 2012, as a consequence of the unfavourable summer weather which made grazing, fertilizer application and silage making difficult on many farms. Tillage yields in 2012 were also severely depressed due to abnormal weather.
Income on dairy farms is estimated to have declined by 27 percent in 2012 to an average of €50,000. While tillage farms are estimated to have experienced income drops of up to 20 percent following the poor year for cereal production. By contrast, income on beef farms increased marginally as prices for cattle remained relatively strong throughout the year.
Looking ahead to 2013, average farm incomes should recover but not to the levels experienced in 2011. Even though further increases in fertiliser and fuel expenditure are on the cards in 2013, feed expenditure should decline significantly compared with 2012 due to lower usage. Prices for milk and pigs are set to rise in 2013, while beef and sheep prices should remain steady. The outlook for cereals prices remains highly dependent on global weather conditions over the next six months.
Also of note is that the ending of some agricultural support payments in 2013 will have a negative impact on income on beef and sheep farms. Overall, Teagasc economists expect average family farm income to rise next year but they expect the percentage increase to be in the single digits.
The executive summary can be viewed at http://www.teagasc.ie/publications/