Agriculture in Ireland

The Irish Agri-Food Industry

The agri-food sector in Ireland in 2016 generated 7% of gross value added (€13.9 billion), 9.8% of Ireland’s merchandise exports and provided 8.5% of national employment. When employment in inputs, processing and marketing is included, the agri-food sector accounts for almost 10% of employment.

Contribution of the Agri-Food Sector to the National Economy

The agri-food sector is one of Ireland's most important indigenous manufacturing sectors, accounting for employment of around 167,500 people. It includes almost 700 food and drinks firms throughout the country that export food and seafood to more than 160 countries worldwide. Economic activity in the agriculture and food sector produces a far bigger return than equivalent activity in other traded sectors of the economy. That is because agri-food companies source 74% of raw materials and services from Irish suppliers, compared to 43% for all manufacturing companies.

Data from the Central Statistics Office (CSO) indicates that the agri-food sector (including agriculture, food, drinks and tobacco as well as wood processing) accounts for around 7% of Economy wide GVA with primary agriculture, forestry and fishing accounting for around 1.6% of Ireland’s GVA.

Employment in the Agri-Food Sector

Composition of Employment in the Agri-Food sector, 2017

Source: CSO Labour Force Survey 2017

Agri-Food Exports

Agri-food exports account for over 11% of total Irish merchandise exports. However, when the low import content of agriculture and food exports and the low repatriation of profits earned in the agri-food sector are taken into account, it is estimated that the agri-food sector accounted in 2008 for around 40% of net foreign earnings from merchandise exports.

Irish food and drink exports grew dramatically in 2017, increasing by 11.6% and were valued at a record €12.7 billion. Since the period 2007-2009 the value of Irish agri-food exports has increased by over 61%..

Agri-Food Exports 2016-2017

Land Use and Farm Structure

• Irish agriculture is primarily a grass-based industry.
• The Census of Agriculture 2016 showed there were 137,500 farms compared to 139,860 farms in the 2010 Census of Agriculture.
• The utilised agricultural area has declined marginally since the 2010 Census of Agriculture to 4,886,600 hectares. The average size of agricultural holding also decreased to 32 ha.
• Approximately 84% (4.09 million ha) of agricultural area is devoted to grass (silage, hay and pasture), circa 9% (0.44 million ha) is in commonage and rough grazing and the remainder circa 9% (0.35 million ha) is allocated to cereals and other crop production.
• There are approximately 137,500 family farms in Ireland with an average size of 32.4 hectares per holding according to the Farm Structure Survey of 2016.

Number of farms and utilised agricultural area, Farm Structure Survey 2016

Main Commodities Output and Exports

Output, Input and Income in Agriculture, 2017

The CSO currently estimates that the operating surplus in agriculture in 2017 increased by over €800m on the level recorded in 2016, a dramatic 31% increase. This very large increase was largely due to a very large increase in the value of agricultural output and relatively stable levels of expenditure on inputs.

Comparing 2017 with 2016 we see that the value of goods output increased largely as a result of large increases in the value of milk output , while subsidy receipts and expenditure on inputs (intermediate consumption remained largely stable).

• Goods output at producer prices: +14% or €992m
• Milk output: 45% or €809m
• Cattle output: 3% or €72m
• Pigs output: 11% or €50
• Sheep output: 3% or €7m
• Cereals output:3% or €6m
• Total intermediate consumption: 4% or €178m
• Fertilisers: 0.4% or €2m.

The value of subsidies less taxes increased by 2%, from €1,608 m in 2016 to €1,637m in 2017.

• The contribution of Primary Agriculture, Fisheries and Forestry (AFF) to the Irish economy in 2017, at 1.2% of GDP, is close to the EU average. Standard macroeconomic measures of the size of the economy (GDP, GNP, GNI) may overstate the size of the Irish economy due to the effect of globalisation. When the size of the economy is measured using the CSO aggregate GNI* that adjusts for these effects the share of the economy accounted for by AFF in 2017 is 1.9%.
• Beef and Cattle production dominate the Irish agricultural economy. Milk and beef output accounted for over 61% of agricultural goods output at producer prices in 2017.

In terms of the destination of Irish food and drink exports in 2017, the United Kingdom at around 38% remained the principal market with sales of  €5.2 billion. Continental EU markets account for 30% of food and drink exports with a combined value of almost €4 billion.

Ireland in 2016 net exports of beef accounted for 85% of production, making Ireland the largest beef net exporter in the EU and fifth largest in the world.

Cattle and Beef

• There were 6.7 million cattle in Ireland according to the 2017 December livestock survey, this represents a 1% increase on the 2016 level.
• Irish beef production is predominately a grass based system, with 617 thousand tonnes produced in 2017.
• In 2017, Ireland exported an estimated 537 thousand tonnes of beef worth approximately €1.85 billion.
• In 2017, 189,000 cattle were exported live from Ireland worth approximately €100 million.

Sheep and Sheep meat

• The December 2017 livestock survey indicates that the Irish sheep flock numbered 3.9 million head, with a breeding flock of 2.7 million head.
• During 2017, Ireland exported an estimated 62,000 tonnes of sheep meat which was valued at approximately €284 million.
• France is the main market for Irish sheep meat exports, accounting for approximately one third of total exports in 2017. The UK is also a substantial export market, accounting for almost 19% of exports.

Pigs and Pig meat

• In the December 2017 CSO Livestock Survey there were 1.6 million pigs in Ireland, this represents an increase of almost 6% on 2017 levels.
• In 2017, Ireland exported an estimated 240,000 tonnes worth approximately €792 million.
• In 2017, the non-EU markets accounted for over one third 0f Irish pig meat exports with, the UK accounting for around 60% of the value of exports with the balance deriving from exports to continental EU markets.

Dairy

• In 2017, total milk output (incl. imports) was estimated at 8,075 million litres.
• From this total milk output, 540 million litres was consumed as liquid milk. In addition to this 223,700 tonnes of butter were produced in 2017.
• In 2017, the total value of dairy exports grew by almost 18% over the 2016 value to over €4.6 billion

Agri-Food Sector contribution to the Irish Economy

The agri-food sector makes a very significant contribution the Irish economy. The Annual Business Survey of Economic Impact (ABSEI) for 2016, conducted by Department of Business, Enterprise and Innovation, provides aggregated estimates for all Irish-owned and foreign-owned firms across a range of variables. As part of this survey, Forfás collates data on Irish Economic Expenditure (IEE), taken to consist of wages, Irish raw materials and Irish services. An analysis of expenditures by companies operating in Ireland highlights the close ties the FD sector in Ireland retains with the national economy in terms of IEE as compared to manufacturing in general.

Irish Economic Expenditure accounts for 70% of total expenditure in the FD sector. This compares favourably to the manufacturing sector when taken as a whole, where the equivalent rate of IEE is 38%.

National Farm Survey 2017

In 2017 861 farms participated in the Teagasc National Farm Survey (NFS), these farms are weighted to represent a national population of approximately 84,599 farms. Overall 2017 was a a good year for farming with average farm income up 32%on 2016. Average family farm income in 2017 is estimated at €31,412.

• In 2017 the average value of gross output increased strongly due largely to a large increase in the Irish milk price and higher milk deliveries.
• Overall farm systems input expenditure increased in 2017 with a 2% increase in overhead costs and a 4% increase in direct costs of production.
• Farming in 2017 continued to be reliant on subsidies, subsidies accounted for over 56% of family farm income on average in 2017. 
• The strengthening recovery in wider Irish economy and labour market was reflected in a 2% increase in the proportion of farm households with an off-farm employment income source.

Overview of the dairy farm system

There were approximately 15,639 Dairy farms with an average income of €86,059 in 2017. FFI in 2017 was 65 percent higher than in 2016 due to higher milk prices and increased deliveries. Milk prices increased significantly in 2017, with average prices recorded by the Teagasc NFS in 2017 32% higher than in 2016. The positive impact of higher prices on the value of Irish dairy farm output was augmented by ongoing expansion of production in 2017. In 2017  milk production per hectare on the average Irish dairy farm increased by 2%

Figure 8. Components of family farm income on dairy farms 2016 & 2017

Overview of the cattle rearing system

There were approximately 19,952 cattle rearing farms represented in the NFS in 2017, suckler cow production is the dominant system on these farms.

The value of output on these farms grew in 2016 due largely to improved cattle pricesin 2017. The value of direct payments on Cattle Rearing farms was mareginally lower (-1%) on the level 2016 level .

Total costs of production in2 017 were 6% higher than in 2016 with both direct costs (+7%) overhead costs (+6%) up strongly. The family farm income earned on the average cattle rearing farm was largely unchanged relative to 2016 with growth in output value offset by higher costs of production.

Figure 9. Components of family farm income on Cattle Rearing farms 2016 & 2017

Overview of the cattle other system

There were approximately 27,025 Cattle Other farms represented in the 2017 Teagasc NFS, with an average income of €17,199 in 2017, a 2% increase on 2016. Cattle fattening is the dominant enterprise on these farms.

The value of output increased on these farms increased due to marginally higher finished cattle prices and increased production volumes.  The value of direct payments was up 1% on 2016. Input expenditure was 3% higher in 2017, with direct costs up significantly on 2016 (+5%)  while overhead costs increased by only 1%.

Figure 10. Components of family farm income on cattle other farms 2016 & 2017

Overview of the sheep farm system

There were approximately 12,758 Sheep farms with an average income of €16,586 in 2016, a 6 percent increase on 2016.

Total farm gross output was largely unchanged Sheep farms, despite a 2 percent increase in Lamb prices.. Overall input expenditure on Sheep farms was lower in 2017 with direct costs of production significantly lower (-6%) while overhead costs of production grew modestly (+2%).

Figure 11. Components of family farm income on sheep farms 2016 & 2017

Overview of the tillage system

There were approximately 7,387 Tillage farms with an average income of €37,028in 2017, a 20 percent increase on 2016.

Gross output value on Tillage farms was lower in 2017 despite higher prices and yields. The decline in cereals area on irish tillage farms was reflected in lower output value. The reduction in area planted and harvested was also reflected in lower levels of levels input expenditure.. Both overhead costs and direct costs of production declined significantly on Tillage farms. Total costs declined by 14% on 2016 levels. With the decline in costs of production on the average Irish tillage farm exceeding the decline in the value of output, average family farm income in 2017 increased by 20%.

Figure 12. Components of family farm income on Tillage farms 2016 & 2017