Some growth in prospect for 2019

THE adverse weather that blighted agricultural production earlier this year has had a significant negative impact on Irish farm income in 2018.  

In their newly-released Outlook 2019 report, Teagasc economists estimate that average farm income in 2018 fell by 15% relative to the record level in 2017.

The long winter led to increased early season production costs in 2018 due to delayed turn out of animals to grass.

 In turn, the extensive drought during the summer led to a collapse in grass growth and meant that farmers had to use additional concentrate feeding. 

Fears of a large-scale winter fodder shortage have been averted by autumn weather conditions that were highly favourable to grass growth and grass utilisation. Good autumn conditions also facilitated late season silage production.

Dairy, beef and sheep farms saw a substantial increase in their expenditure on feed in 2018.  On the typical dairy farmfeed expenditure is estimated to have increased by about 50%.

Tillage farmers had serious difficulty with spring sown crops in 2018, with yields well down on normal. 

Pig farms saw margins squeezed by a severe drop in pig prices at a time of rising feed costs.

Overall, average farm income in 2018 across the various production systems is estimated to have fallen by 15%. The largest reductions are likely to have occurred on dairy farms, where the average income reduction in 2018 is estimated to be 22%. 

With the assumption that weather returns to normal in 2019, there should be a major reduction in feed expenditure on grassland farms, which will help to lift margins in the dairy, beef and sheep sectors. Overall, this should lead to an 8% increase in the average farm income in 2019, with income set to recover on dairy and drystock farms. 

In spite of a return to trend yields, lower prices and rising costs are forecast to lead to a fall in tillage farm incomes in 2019.