Higher milk prices see incomes of NI farmers nearly double in a year
IMPROVED milk prices helped total farm incomes in Northern Ireland to almost double from £253m to £473m, according to official figures.
Statistics from the Department for Agriculture, Environment and Rural Affairs (DAERA) show that the 87% rise from 2016 to 2017 was primarily led by a recovery in income from milk.
The dairy sector was the largest contributor to the total value of gross output at £662m, up 46% on a year earlier.
At the height of the “dairy crisis” here in 2015 milk was sold by farmers for just under 19p per litre. Now it is sitting at just over 30p per litre.
However, behind the sharp income rise is a dependency on European subsidies.
When a direct subsidy of a quarter-of-a-billion pounds (£287m) is removed, the increase is £27m year on year.
The so-called Total Income from Farming (TIFF) measurement represents the return on own labour, management input and own capital invested for all those with an entrepreneurial involvement in farming. It represents farm income measured at the sector level.
Total output for agriculture in Northern Ireland last year was up 17% at £2.09bn.
Following the increase in 2017, TIFF is now 99% above the average of the last 20 years after accounting for inflation.
The Ulster Farmers’ Union dairy chairman William Irvine said that while the figures reflected a recovery in prices, there were still many dairy farmers paying off debts incurred over the last few years.
“Northern Ireland dairy farmers faced rock bottom milk prices for over two years. According to DAERA, farm gate milk prices averaged 20.78p per litre in 2015 and 20.56p per litre in 2016,” he said.
“At a time when the average break-even cost of production was 25/26p per litre, farmers were losing money for every litre of milk for over a two-year period.”
At the time many farmers faced cash flow problems and the financial difficulties resulted in some being forced to sell livestock and extend overdrafts.
Mr Irvine added: “Prices started to recover in 2017, and this is reflected in the TIFF figures, but to date many dairy farmers are still paying off the debts incurred in 2015 and 2016, with some still operating at a loss.”
The average gross margin for each dairy cow increased by £88, from £513 in 2015/16 to £600 in 2016/17.
While dairy farming was the highest performing sector, the output value of cattle was 6% higher at £460m, though the sheep sector decreased by 2% to £73m.
There were increases in the values of output for all three intensive livestock sectors during 2017, with the pig sector increasing by 35% to £163m, the egg sector up 5% to £100m and the value of poultry output up 9% to £275m.
Farm business income measured across all farm types is expected to increase from an average of £21,928 in 2016/17 to £37,880 this year — an overall increase of £15,952 or 73% per farm.