December 15, 2021

Family farms in Ireland see 20% increase in income in 2021

Family farm income (FFI) in Ireland increased by 20% in 2021, according to Teagasc economists in their recently published Teagasc Outlook 2022 report.

Dairy, tillage and sheep farms have experienced a significant increase in income in 2021. However, even though cattle prices increased in 2021, incomes on most cattle farms are likely to be unchanged on the 2020 level, due to rising input prices and lower direct payments.

While the agricultural sector has managed to avoid much of the disruption due to COVID-19, the worldwide recovery has led to supply-chain challenges along with big increases in natural gas and crude oil prices. At the farm level, feed, fertiliser and fuel prices, three of the main items in farm production costs, have all been on the increase in 2021.

Prices for milk, cattle, sheep and cereals have increased in 2021 prices, but pig prices have fallen from the high levels recorded in 2020. On the production side, milk increased by 6% while cereal and pig production was also up. Cattle and sheep production remained relatively stable.

On dairy farms, incomes are estimated to have increased by 28% in 2021, and the average income on tillage farms is estimated to have increased by over 45%, reflecting better prices and yields for grain and straw along with payments from Straw Incorporation Measure (SIM).

The average income on beef farms is estimated to be about the same for 2021 as for 2020. Higher beef cattle prices in 2021 were offset by higher production costs and the lower level of support payments on many cattle farms. However, specialist cattle finishers saw incomes increase.

Higher cereal harvest prices in 2021 will likely lead to a further increase in feed costs in 2022. The rise in oil prices should be followed by a stabilisation at this higher level, so fuel prices in 2022 will average substantially higher than in 2021. However, the greatest concern on the cost side for 2022 is the price of fertiliser and its availability.

Farm output prices in most sectors were quite high in 2021 with relatively small increases in 2022 for pigs and tillage, in the range of 2-3%. Milk prices are not forecast to remain steady, with only small changes in cattle prices anticipated.

- Teagasc