Farm Incomes up in 2021 due to higher output prices

Higher output prices across most farm enterprises were the main driver of the increase in farm incomes in 2021, a Teagasc review has concluded; however, the scale of the increase in income varied considerably across farm systems.

The results of the Teagasc National Farm Survey 2021 are representative of almost 85,000 farms in Ireland. In general, farms experienced an increase in production costs, as key farm input prices for fuel, feed and fertiliser all rose in 2021, which marked the beginning of the escalation in costs that has since intensified in 2022. 

As the global economy began to emerge from the slowdown caused by the COVID-19 pandemic, supply chains struggled to respond to increased demand, leading to sharp increases in crude oil and natural gas prices, with knock on increases in fertiliser, fuel and electricity prices as well as prices for a wide range of goods and services across the economy. Collectively these led to a significant increase in farm production costs in 2021.

Rising international agricultural commodity prices were a feature of 2021 and these price increases led to higher farm level output prices in Ireland.

Weather conditions in Ireland in 2021 led to a relatively normal level of grass production, while the weather was favourable in the case of Irish cereal crop production, leading to an overall increase in Irish cereal yields. 

Across the key farm output categories, cereal and milk prices performed best in 2021.  Prices for cereal crops were up by over 30% in some instances in 2021 compared to 2020, while a 13% increase in average milk price was recorded. Lamb prices also increased by almost 30%. Cattle price increases were smaller, but significant, at 8% for young cattle and 12% for prime cattle. 

In spite of higher Dairy system production costs, which rose by 11 percent, a further increase in milk output volume and significantly higher milk prices, resulted in an average dairy farm income of €97,350 in 2021, an increase of 23% or €18,300 on the 2020 level. 

In the Cattle Rearing system, which is made up of farms that are mainly specialised in suckler beef production, costs increased by 10% in 2021. However, the value of output on cattle rearing farms increased in 2021 by 15%, mainly due to higher cattle prices. The value of support payments for Cattle Rearing farms also increased in 2021.  Overall, the average Cattle Rearing income of €10,927 in 2021, was up 30%, or €2,500 compared with the 2020 level.

In the ‘Cattle Other’ system, which comprises mainly of beef finishing farms, but also includes farms selling store cattle, production costs increased slightly in 2021. While support payments were lower, the value of farm output increased by 3% due to higher cattle prices. In combination this resulted in an average income of €16,416 in 2021 for the Cattle Other System, an increase of 6% or €900 compared with the 2020 level.

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