Average tillage income rises 32% year-on-year
Favourable weather conditions and an increase in cereal area in 2022 resulted in an increase in cereal production volumes in aggregate in 2022, results from the National Farm Survey, which was published earlier this week, reveal.
A total of 6,246 tillage farms were represented in the survey in 2022, earning an average income of €76,654, up 32% year-on-year. Cereal prices at harvest in 2022 were up on the already high 2021 level. Cereal prices were high due to relatively low international stocks, adverse weather in key production regions and reduced availability due to Russia’s invasion of Ukraine.
While production costs were also higher in 2022, the increase in output value resulted in an increase in margins on the average tillage farm. Table 1 reports the components of average tillage Family Farm Income (FFI). Gross output increased by 32% to €210,286 on the average tillage farm in 2022.
Table 1: Components of average tillage Family Farm Income 2022
| 2022 | 2022/2021 change | |
|---|---|---|
| € | % | |
| Gross output | 210,286 | +32 |
| Of which direct payments | 29,121 | +5 |
| Total costs | 133,632 | +32 |
| Of which direct costs | 70,759 | +45 |
| Of which overheads | 62,873 | +20 |
| Family Farm Income | 76,654 | +32 |
Direct payments
On average, direct payments increased by 5%, compared to 2021. While the number of participants was small, the average payments received through the Straw Incorporation Measure (SIM) and Protein Aid payment were significant at approximately €3,900 and €2,900 on average. Similarly, the average payment received through the Tillage Incentive Scheme was €1,800.
Costs
Overall, average costs increased on tillage farms in 2022 by 32%, to €133,632. Direct costs increased by 45% year-on-year, with an increase in fertiliser expenditure alone of 125% to €30,645 on the average tillage farm.
Expenditure on crop protection also increased, by 26%, to €12,181, with purchased seed also up by 22%, on average, to €6,623. Expenditure on contracting charges also increased by 46% year-on-year to €14,110, on average. As many tillage farms also have a significant cattle enterprise, some will incur expenditure on purchased concentrates. However, the data indicate that spending on concentrates decreased on tillage farms in 2022, to €3,974 on average. This is reflective of the more specialised nature of the farms sampled in 2022.
Overhead costs
Overhead costs on tillage farms increased in 2022, by an average of 20% year-on-year. The average increase in machinery depreciation was 26% to €14,968 and machinery operating costs also rose by 21% to €13,911. In terms of some other overhead subcomponents, conacre rental costs were up 48% in 2022 to €10,902 on average. Expenditure on fuel also increased to €7,473, up 42%. Building depreciation increased by 60% to €5,137. Car, electricity and phone expenditure was also up 8% to €4,712. Buildings maintenance costs increased to €1,329, up 22%, while land improvement maintenance was down by 15% to €1,619. Other overhead costs remained relatively stable year-on-year at €5,349.
Average tillage farm area
Table 2 indicates that the average tillage farm area increased by 4% in 2022 to 71ha. Of this, 41ha was dedicated to cereals, an increase of 7% compared to 2021. The average tillage farm gross margin was €1,979/ha in 2022, up 22% year-on-year. This included a Basic Payment of €300, which was relatively unchanged from the 2021 level.
Table 2: Average tillage enterprise indicators 2022
| 2022 | 2022/2021 change | |
|---|---|---|
| Farm size (ha) | 71 | +4% |
| Of which cereals (ha) | 41 | +7% |
| Cereal output (€/ha) | 3,118 | +36% |
| Basic Payment (€/ha) | 300 | +1% |
| Gross margin (€/ha) | 1,979 | +22% |
Distribution of Family Farm Income
Figure 1 presents the distribution of average FFI earned on Tillage farms since 2020. There is a clear increase in the proportion of farms in the higher income brackets, with those earning a FFI in excess of €50,000, up 12 percentage points year-on-year, representing 45% of farms. Of these, 19% earned more than €100,000. A further 33% of tillage farms earned between €20,000 and €50,000, on average, in 2022.
Figure 1: Average tillage Family Farm Income distribution 2020-2022
The proportion of tillage farms earning below €5,000 in 2022 was down to 4%, on average, with those earning between €5,000 and €10,000 down to 3%. 15% of tillage farms reported a FFI of between €10,000 and €20,000 in 2022.
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