69% drop in Dairy Family Farm Income in 2023
Representative of over 15,000 dairy farms nationally, the Teagasc National Farm Survey (NFS) 2023 has shown that the average Family Farm Income on dairy farms last year was €49,432 – a decline of 69% or in excess of €105,000 on year previous levels.
At an average farm size of 65ha carrying 95 cows, this represents a farm income of €765/ha.
Where record milk prices served to insulate dairy farmers against rising costs in 2022, last year was different. A sharp decline in milk price, along with only modest decreases in costs, resulted in a fall in dairy farm incomes in 2023.
Driving this decline in dairy family farm income was a reduction in gross output. Not only was the farm gate milk price back, but production levels were also lower. Overall, milk production decreased in 2023 by just over 4% to 11,669 litres per hectare, while a 43c/L average milk price was 28% lower than received the year previous. As a result, this lead to a decline in gross output of 27% to €295,928 or 30% on a per hectare basis to €5,200/ha. Once costs were accounted for, this left gross margins at €2,718/ha – back 46% on 2022 levels.
Key messages:
- Output value decreased in value due to lower milk prices and lower milk volumes;
- Production costs were relatively stable but at a high level, due to both high direct and overhead costs;
- Farm income decreased due to sharply lower milk prices, lower milk production, alongside high production costs.
Table 1: Components of average Dairy Family Farm Income 2023 (Teagasc National Farm Survey 2023)
| 2023 | 2023 to 2022 change | |
|---|---|---|
| € | % | |
| Gross output | 295,928 | -27 |
| Of which Direct payments | 21,667 | +1 |
| Total costs | 246,498 | -1 |
| Of which direct costs | 145,751 | -1 |
| Of which overheads | 100,745 | -1 |
| Family Farm Income | 49,432 | -69 |
Production costs remain high
Along with the fall in gross output levels, dairy farmers continued to operate in a high cost environment in 2023. On average, the NFS reports, just a 1% decline in production costs were recorded from the very high costs experienced in 2022.
Direct costs to note include:
- Concentrate expenditure totalled €61,535 in 2023 – a 5% reduction;
- Feed volumes averaged 1,207kg per dairy cow in 2023, down marginally compared to 2022;
- Due to lower grass availability, expenditure on purchased bulky feed increased by 8% to €6,879 on average in 2023;
- Fertiliser expenditure on dairy farms decreased by 23% in 2023 to €23,845, fertiliser use was reportedly back 8%;
- Machinery hire (contracting) expenditure increased by 6% on average in 2023 to €17,391;
- Other livestock and veterinary costs increased by 5% to €16,339;
- Other direct costs increased by 5% in 2023 to €14,705.
The NFS also reports that overhead costs decreased somewhat on the average dairy farm in 2023, totalling €100,745 in 2023 – a decline of 1% on 2022 levels.
The above is just a brief summary of the information contained within the National Farm Survey 2023 relating to dairy farm performance. For more detailed information, access the full NFS 2023 report authored by Emma Dillon, Trever Donnellan, Brian Moran and John Lennon, here.