New IFAC research reveals that after a difficult 2018, lower feed prices helped improve margins for livestock farmers last year. It was a different story on tillage farms, however, where despite 2019’s higher yields, the weaker grain price eroded margins. Detailed coverage of the findings, supplemented by an analysis of 2,548 sets of 2019 farm accounts, will be published in IFAC’s forthcoming 2020 Irish Farm Report.
As in previous years, the top 25% of farmers in the beef and dairy sectors significantly outperformed other farmers, with better cost management the main driver of higher returns. On dairy farms, average profits (excluding other income) rose almost 18% in 2019, reaching €948 per ha. Feed costs fell by €209 per ha with costs on a per litre basis down almost 7%. On beef farms, average profit was €435 per ha, up 12% on 2018. However, when other income such as BPS, GLAS and BEEP is excluded, these farms lost an average €101 per ha. Sheep farmers achieved marginal gains but, again, these businesses are loss-making when other income sources are excluded.
On tillage farms, despite higher yields, weaker grain prices saw average profits fall by €99 per ha (to €153 per ha).
Business structure can have a significant impact on lifestyle, finances and farm sustainability. While most farmers operate as sole traders, the number of partnerships and limited companies has been growing in recent years. While fewer than half of the farmers who participated in this year’s research prepare budgets and cashflows, those who do say it gives them greater clarity when making decisions about their business. Despite farms being a valuable asset, a staggering 84% of survey respondents have no formal succession plan in place. 93% of respondents want to reduce their carbon footprint and more than 7 in 10 support the use of more sustainable energy on their farms.
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