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2013 - A Mixed Year for Income at Farm Level

In spite of the fodder crisis, which Teagasc estimates cost farming 400 million euro, Irish agricultural sector income was relatively unchanged in 2013 compared with 2012. However, at the farm enterprise level, significant variations in outcome lie behind the stable aggregate figure, with some enterprises doing better than others. These were the main conclusions in the newly published review of farm incomes in 2013 produced by Teagasc economists.

Following a sharp rise in feed use on dairy and drystock farms in 2012, feed use increased further in 2013, due to the depletion of fodder stocks brought on by poor weather in the summer of 2012. This problem was compounded by the late arrival of good grass growing conditions this year, due to the abnormally cold spring period. Feed prices were also higher in 2013, leading to record levels of expenditure on feed on many farms. The fodder crisis also led to increased fertiliser usage in 2013, adding further to the overall increase in production costs.

The Teagasc report indicated that it was not all bad news in 2013. Due to drought in New Zealand and strong demand on world dairy markets, Irish dairy farmers saw a spectacular increase in milk prices in 2013, which persisted right through the peak production months. An average farm gate milk price of 38 cent per litre helped ensure that Irish milk production also recovered in 2013 from the weather related dip experienced in 2012. Teagasc economist Trevor Donnellan said that, on balance, the rise in milk prices was more than sufficient to offset the increase in dairy production costs and consequently Irish dairy farm margins increased in 2013.

However, 2013 was a mixed year in the drystock sector. Dr. Kevin Hanrahan of Teagasc said that margins for beef calf producers fell due to the rise in production costs in 2013, with poor demand for young animals leading to a fall in calf and weaning prices. Cattle farmers specialising in fattening and slaughtering animals, fared better as they benefitted from an increase in finished animal prices. However, the benefits of this price rise were offset by higher production costs.

Cereal production conditions in Ireland were quite good in 2013 leading to above average yields for the main cereal crops. However, 2013 cereal prices were well down on the 2012 level due to an improved global harvest, which eased concern about cereal availability globally. Dr. Fiona Thorne, one of the authors of the report, said that in spite of the large increase in yields, the relatively depressed cereal prices, coupled with increased production costs, means that income on cereal farms is likely to have fallen slightly this year.