Savings made this year in terms of feed and forage on livestock farms are large enough to offset increases in input prices, the Teagasc mid-year outlook report states. The savings are compared to the high costs of feed during the spring snow and summer drought of 2018.
Teagasc economists say that dairy incomes, which fell substantially in 2018, are set to rebound in 2019 due to savings on feed and strong growth in milk production. There has been a large increase in milk yields this year despite lower growth in dairy herd numbers, which could see the volume of Irish milk production increase by 10%. If weather conditions stay favourable, the average income on dairy farms could increase by about €12,000 in 2019, taking the average Irish dairy farm income to €74,000 – a 20% increase.
Difficulties
This year is proving more difficult on beef and sheep farms. Feed use has returned to normal levels, but the drop in cattle prices is having a big effect on margins. Weanling prices are down 8% and finished animal prices down more than 6%, relative to 2018 levels.
However,Teagasc says that incomes on the average cattle finishing farm will increase, largely due to the receipt of BEAM payments. Without this exceptional aid, incomes this year would only recover a little on last year’s very low levels.
"Excluding the exceptional aid measure, the gross margins on cattle finishing farms will increase (+13%) and on single suckling farms (+4%)," the report states.
Sheep
In the sheep sector, lamb prices are forecast to average 9% lower than in 2018. The reduction in feed costs will not be sufficient to offset the forecast decline in gross output, the report says. Incomes on sheep farms are set to fall by 4% in 2019, while the average income on tillage farms could drop below €35,000, a decline of over 20%.
Incomes
In income terms, tillage farms had a better year in 2018 than the weather conditions might have suggested, due to a sharp rise in cereal prices. Production conditions for cereal crops in 2019 have been considerably better, however inflation of input prices and a 30% reduction in harvest prices will lead to a drop in cereal margins.
Read more
Beef price update: Producers hit with another 5c/kg cut in beef price
Dairy trends: Chinese dairy imports fall in May
Lodging reported in crops after heavy rain
Savings made this year in terms of feed and forage on livestock farms are large enough to offset increases in input prices, the Teagasc mid-year outlook report states. The savings are compared to the high costs of feed during the spring snow and summer drought of 2018.
Teagasc economists say that dairy incomes, which fell substantially in 2018, are set to rebound in 2019 due to savings on feed and strong growth in milk production. There has been a large increase in milk yields this year despite lower growth in dairy herd numbers, which could see the volume of Irish milk production increase by 10%. If weather conditions stay favourable, the average income on dairy farms could increase by about €12,000 in 2019, taking the average Irish dairy farm income to €74,000 – a 20% increase.
Difficulties
This year is proving more difficult on beef and sheep farms. Feed use has returned to normal levels, but the drop in cattle prices is having a big effect on margins. Weanling prices are down 8% and finished animal prices down more than 6%, relative to 2018 levels.
However,Teagasc says that incomes on the average cattle finishing farm will increase, largely due to the receipt of BEAM payments. Without this exceptional aid, incomes this year would only recover a little on last year’s very low levels.
"Excluding the exceptional aid measure, the gross margins on cattle finishing farms will increase (+13%) and on single suckling farms (+4%)," the report states.
Sheep
In the sheep sector, lamb prices are forecast to average 9% lower than in 2018. The reduction in feed costs will not be sufficient to offset the forecast decline in gross output, the report says. Incomes on sheep farms are set to fall by 4% in 2019, while the average income on tillage farms could drop below €35,000, a decline of over 20%.
Incomes
In income terms, tillage farms had a better year in 2018 than the weather conditions might have suggested, due to a sharp rise in cereal prices. Production conditions for cereal crops in 2019 have been considerably better, however inflation of input prices and a 30% reduction in harvest prices will lead to a drop in cereal margins.
Read more
Beef price update: Producers hit with another 5c/kg cut in beef price
Dairy trends: Chinese dairy imports fall in May
Lodging reported in crops after heavy rain
This is a subscriber-only article
SHARING OPTIONS: