Dairy farmers will take a €720m hit on incomes this year

THE dairy sector is facing a massive slump in overall earnings as the full impact of this year’s extreme weather events begins to become apparent.

Teagasc estimate that average dairy farmer incomes will fall by 40 -50pc on 2017 levels.

Based on last year’s average dairy income figure of €80,000 this translates into a €720m decline in earnings. Writing in today’s

Teagasc analyst Trevor Donnellan cautions that from a farm income per- spective “the end result for 2018 is not going to look pretty”.

“The best guess at this point is that on average Irish dairy farm income in 2018 could be down to half its 2017 level — somewhere in the €40,000 to €50,000 range,” he writes.

“Factors such as farm location, soil type and stocking density will mean that the effect of the adverse weather on individual farms will vary to some extent.

“Looking ahead to 2019, weather conditions will still be a major factor.

“Farmers will have their fingers crossed for a short winter, but even a normal winter is likely to be problematic from a cost perspective, with feed requirement likely to be higher than normal.

“From the dairy market perspective, the lower than anticipated growth in global milk production in 2018 will be of benefit in firming up milk prices in 2019.

“As things stand it does not look like there will be any major movement in milk prices in 2019, with a period of prices stability likely.”

Tillage warning

Meanwhile, tillage analysts have warned that grain growers are facing a serious threat to their incomes depending on the outcome of an EU Commission decision on the widely used fungicide, chlorothalonil (Bravo).

The chemical’s approval expires on October 31 and the Commission will make a decision on a renewal by the end of this year. Industry experts claim the loss of chlorothalonil will reduce profits from wheat and barley production by 50pc and 65pc.

“Cereal production would only be viable on the best of land and in low rainfall areas,” says tillage analyst PJ Phelan.

“That would in fact leave growers producing the national average yield with no net income, exclude much of the country from production apart from the east coast and leave all rented land making a loss.”

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