Farm incomes are expected to rise

A NEW report suggests that average farm family income will rise in 2020.

Economists from Teagasc estimate that the average family farm income (FFI) in Ireland increased by around 7 per cent in 2019. They suggest this increase may be due to a fall in animal feed use on dairy, beef and sheep farms, along with subsidy supports provided to cattle producers to mitigate the effects of falling beef prices.

The Teagasc ‘Outlook 2020, Economic Prospects for Agriculture’ report was published on 26 November at the annual Teagasc Economic Outlook conference.

It expects further improvements in average FFI in 2020 as Irish milk production continues to expand. The report also forecasts increases in fertiliser, and cattle and sheep feed prices in 2019 will reverse in 2020, leading to a slight drop in production costs for grassland and tillage farms.

Cattle and cereal prices are also forecast to improve slightly. Milk and lamb prices are expected to remain relatively stable for the year. However, pig feed prices are forecast to rise slightly in 2020, but this could be offset by an increase in pig prices.

The report predicts FFI to increase in 2020 on dairy, tillage and sheep farms, with minor changes in income for cattle farms. Overall, the average FFI is forecast to rise by 7 per cent in 2020.

The report also highlights a wide disparity in average income levels across the various farm types, noting that dairy and tillage farms typically generate more income than beef and sheep farms.

While farming in 2018 was dominated by unfavourable weather conditions, production conditions improved in 2019. This led to a reduction in the costs of animal feed this year. Lower fertiliser use and lower spending on silage production also led to cost savings, but this was offset by price increases in animal feed and fertiliser.

The report notes that the production of beef and sheep was disrupted by the recent blockade of meat factories.

It highlights that the African Swine Fever outbreak in China resulted in increased international pig prices. However, prices for milk, beef and sheep were all lower in Ireland in 2019 compared to 2018.

Average incomes on dairy farms were estimated to have increased in 2019. However, incomes on tillage farms have fallen due to a drop in cereal prices.

Incomes on beef farms are up in 2019, due in part to aid made available to offset falling beef prices in the fourth quarter of 2018 and the first quarter of 2019.