Dairy earnings up 23 percent and approaching €100,000 as other farm earnings lag behind

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Dairy farm incomes rose 23 percent in 2021 to an average of €97,300, well ahead of other sectors, the latest figures from the Teagasc National Farm survey show.

Higher producer prices on most farms were the main reason for the increase in farm incomes in 2021, she noted, but the magnitude of the income increase varied significantly across farming systems.

Its annual National Farm Survey of nearly 85,000 farms in Ireland found that farms in general saw an increase in production costs as key input prices for fuel, feed and fertilizer all rose in 2021, marking the start of the escalation in costs that has been going on ever since intensified in 2022.

Rising international soft commodity prices have been a feature of 2021 and these price increases have translated into higher producer prices at the farm level in Ireland.

Weather conditions in Ireland in 2021 resulted in average grass production and the weather has been good in the case of Irish grain production resulting in an overall increase in grain yields.

In the main agricultural production categories, grain and milk prices performed best in 2021. Grain crop prices rose in some cases by over 30 percent in 2021 compared to 2020, while the average milk price increased by 13 percent. Lamb prices also rose nearly 30 percent. The price increases for cattle were smaller but significant at 8% for young cattle and 12% for prime cattle.

Despite higher production costs of the milk system, which have increased by 11 percent, a further increase in milk yield and significantly higher milk prices led to an average dairy farm income of €97,350 in 2021, an increase of 23 percent or €18,300 compared to 2020.

In the cattle sector, which consists of farms specializing mainly in beef cattle production, costs increased by 10 percent in 2021. However, the value of production on cattle farms increased by 15 percent in 2021, mainly due to higher cattle prices. The value of support payments for cattle farms also increased in 2021. Overall, the average income from cattle farming increased by 30 percent, or €2,500, from €10,927 in 2021 compared to 2020 levels.

In the “Other cattle” system, which mainly includes cattle fattening farms, but also farms that sell stored cattle, production costs increased slightly in 2021. While support payments were lower, the value of agricultural production rose 3 percent due to higher livestock prices. Together this resulted in an average income of €16,416 in 2021 for the cattle (other system), an increase of 6 per cent or €900 over 2020 levels.

Production costs on sheep farms increased in 2021 mainly due to higher feed prices, but the sector saw a 16 percent increase in the value of farm output, driven by higher lamb prices. On average, the amount of direct payments to sheep farms has slightly decreased. The average income on sheep farms reached almost €20,500 in 2021, a 14 percent increase or €2,600 from 2020 levels.

Due to higher fertilizer, feed and wage taxes, production costs on arable farms increased by 34 percent in 2021, a much larger percentage increase than in grassland systems. However, the average income on arable farms increased by 77% to almost €59,000 in 2021. Because arable farms had particularly good production conditions in 2021, which led to higher crop yields.

Substantially higher grain prices in 2021 also helped boost the value of agricultural output, which rose 47 percent. In arable farms, too, the average level of support payments increased slightly in 2021.

Although pig farm incomes are not reported in the Teagasc National Farm Survey Report, the data shows that incomes have fallen due to higher feed prices and other cost increases coupled with a significant drop in hog prices. These price movements caused hog producers to move into loss-making territory throughout 2021.

Taking into account income developments across the different operating systems, the average family farm income in Ireland increased by 26% to just over €34,300 in 2021.

https://www.independent.ie/business/farming/agri-business/dairy-incomes-up-23pc-edging-towards-100k-as-other-farm-incomes-lag-behind-41751518.html Dairy earnings up 23 percent and approaching €100,000 as other farm earnings lag behind

Fry Electronics Team

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