Average dairy farm income in Ireland now above €86,000

Dairy farming is by some way the most profitable agricultural activity in the State with average incomes hitting a record €86,115 last year on foot of a strong upturn in dairy prices globally.

This was more than twice the average farm income in the Republic last year, which was estimated at €31,374, and five times what cattle and sheep farmers typically earned in 2017, which ranged between €12,000 and €17,000 per annum.

The figures, contained in farming agency Teagasc’s latest farm income survey, reflect the disparity of incomes achieved by different farming systems here.

Teagasc noted that dairy incomes were boosted by a strong recovery in the global dairy market prices last year, which were up 32 per cent on their 2016 level.

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The sector, which accounts for just under 16,000 of the State’s 85,000 farms, also benefitted from an unprecedented surge in butter prices internationally, which rose to a record €7,000 a tonne last year.

Most of Ireland's dairy produce is exported in the form of protein powders and infant formula to fast-growing Asian markets such as China or as butter and cheese to Europe and the US.

Ornua, formerly the Irish Dairy Board, expects sales of its flagship Kerrygold butter brand, which is the top-selling butter in Germany, to hit €1 billion next year.

Teagasc director Gerry Boyle told The Irish Times that while the figures indicate positive growth, its income survey "conceals an awful lot".

If dairy farms are excluded, the average income “drops to approximately €20,000”, he said, while more than two thirds of farms saw “little change” in their income.

In the case of sheep farms the average income increased by 8 per cent due to the support provided by the Sheep Welfare Scheme, while cattle farms saw little to no increase.

Off-farm jobs

Prof Boyle said there are “very poor” incomes particularly on sheep farms and cattle farms.

“Clearly no family could survive adequately on that income level so most of those families would have to have an off-farm job,” Prof Boyle said.

The survey also found 31 per cent of farmers have an off-farm job and the most common off-farm jobs are in agriculture or construction.

Some 30 per cent of farms were categorised as vulnerable, a decrease of 5 percentage points since 2016, attributed to an increase in farms categorised as ‘viable’ and ‘sustainable’.

Prof Boyle said some farms can be assisted to improve their technical capabilities through education and training but with others “very little can be done about their level of vulnerability”.

He added: “Maybe the farmers are too elderly or they might be living on very small farms.”

Teagasc expects the average farm income to decline in 2018.

“There’s a natural volatility in farming incomes. They fluctuate. Prices can change. Plus we can’t predict the weather,” Prof Boyle said.

He said dairy prices have begun to fall and the fact that we had a “very bad” winter and spring will “affect this year’s income negatively”.

The NFS report also said while the issue of a fodder shortage has been prominent in farm media commentary since last winter most of its financial impact on farms won’t be clear until the 2018 survey.

The NFS studies 85,000 farms in Ireland annually. The full 2017 report is available at teagasc.ie.