Dairy & Tillage Farm Incomes Reduced for 2023

Dairy & Tillage Farm Incomes Reduced for 2023

Provisional figures show the total farming income for Northern Ireland was £341m in 2023. Farm incomes in Northern Ireland almost halved in 2023, new figures from the Department of Agriculture, Environment and Rural Affairs (DAERA) show.

The provisional estimates indicate that total income from farming (TIFF) fell from £609m in 2022 to £341m in 2023 – a reduction of 44%.

TIFF is the return on own labour, management input and own capital invested. Farmers bought less fertiliser and lime in 2023, but spent more on feedstuffs, which accounted for more than half the total value of gross inputs.

Across all farm types, farm business income in Northern Ireland is expected to decrease by 46% a farm, from an average £51,043 in 2022-23 to £27,345 in 2023-24. The reductions are expected mainly in cereal (-80%) and dairy farming (-70%).But increased pig prices mean incomes from pig farms are expected to rise by 84% in 2023-24.

Higher beef prices also mean incomes from cattle and sheep in less favoured areas – a classification of land that is not as productive – and cattle and sheep in lowland farms are expected to increase by 8% and 3% respectively.

A new report, by economists at Teagasc, provides the latest estimates of average incomes for various farm types in the Republic for 2023. A high production cost environment has dominated agriculture over the last two years. Looking at costs for the full year, there has been only a minor reduction in production costs in 2023 compared with 2022.

At the same time, there have been significant negative price movements in some farm output prices, especially for milk and cereals. Dairy and tillage farm incomes are estimated to be down sharply in 2023.

Incomes on cattle rearing farms are estimated to be up from the particularly low level of 2022. Incomes on cattle other farms (mainly finishers) are expected to be relatively unchanged on the 2022 level, as the positive effect from higher finished cattle prices is offset by lower production volume. Incomes on sheep farms in 2023 are also estimated to be relatively unchanged on the 2022 level.

With the sharp decline in milk prices and with average milk production costs of close to 37c/L in 2023, it is estimated that the average dairy farm income will be down 60%. This decrease would bring the average dairy farm income in 2023 back to €59,000. Irish milk production is expected to be down 1% in 2023 compared with 2022. While dairy cows numbers have increased marginally in 2023, this has been offset by slightly lower milk yields, in the face of low milk prices.

The average income on cattle rearing farms is estimated to have increased by €2,000 or 24% in 2023 and brings the average cattle rearing farm income up to about €10,300. This estimated increase is largely due to the increase in young cattle prices during the autumn and some declines in input expenditure. The introduction of the Suckler Carbon Efficiency Programme (SCEP), National Beef Welfare Scheme (NBWS) and the Agri-Climate Rural Environment Scheme (ACRES) provides important support to incomes for farms in this system.

While weanling prices are estimated to be up 7% in 2023, elevated feed prices and overhead costs mean that the average net margin (profit exclusive of direct payments) on cattle rearing farms is in a break-even position in 2023.

The average income for cattle other farms in 2023 is forecast to be unchanged at about €18,600. The annual average finished cattle price was 3.5% higher in 2023. However, beef production decreased by 4% in 2023. The majority of farms in both cattle systems continue to benefit from the Fodder Support Scheme introduced in 2022.

Sheep farms have experienced a 3% drop in lamb prices in 2023 with reductions in total production costs. Sheep meat output volume is up marginally in 2023. The average income on sheep farms in 2023, which is further supported by payments form the Sheep Improvement Scheme, is estimated to about €17,000 about 4% higher than in 2022.

In the tillage system, Irish cereal yields will be down significantly for many crops in 2023 compared to 2022, due to less favourable weather during parts of the growing season and again at harvest time. The spring barley crop and winter wheat crop were particularly affected with yields per hectare down 21% and 14%, respectively. Irish cereal harvest prices were also down over 30% in 2023 compared with harvest prices in 2022, reflecting increased grain availability internationally due to favourable weather conditions in key production regions.

While some cost items such as fertiliser fell in price over the course of 2023, the decline came too late in the growing season to bring about significant savings for benefit cereal farmers. While cereal farmers will benefit from a range of support measures in 2023, the average tillage farm income is forecast to be approximately 60% lower in 2023 than in 2022. This would bring the average income in the system down to around €30,000.

Pig farmers incurred substantial losses in 2021 and 2022 due to low pig prices and record high feed and energy prices. However, Irish pig prices rose substantially in 2023 returning the sector to profitability. However, output volume was down in 2023, reflecting the contraction in the sow herd which occurred in response to the recent financial difficulties in the sector. It is estimated that the margin over feed in 2023 will be 69c/kg, which is above the five year average.

The average farm income in 2023, is estimated to be down 44% to just under €24,800, but the decrease is almost entirely driven by the drop in income experienced in the dairy and tillage sectors.

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