BETTER farm: 2019 costs 15% lower than 2018

Inside this Thursday’s Irish Farmers Journal, we will have the full 2019 e-Profit Monitor results for our BETTER farm participants. These results will also be the final accounts to come out of phase three of the programme, after the third and final year came to a close at the end of January this year.

From the outset, the main financial target for participating farms was to hit the much sought-after €1,000/ha gross margin figure. While steady progress was made in year one of the programme (2017), it quickly became a case of ‘one-step forward, two steps back’ as disastrous weather conditions in 2018 brought progress to a standstill.

While the €1,000/ha gross margin average for the group looks set to be a bridge too far, too soon, the group will be hoping for a steady rise in profits for 2019. This week’s paper will reveal the full financial results.

Costs

Ahead of that, we will take a brief look at the costs incurred on farms in 2019.

Table 1 shows the average costs in 2019 for the 23 programme farms, as well as the same costs for 2018. These cost are expressed on a per hectare basis.

Looking at Table 1, total variable costs in 2019 were €958/ha – a full €163/ha or 15% less than in 2018.

Significantly, over half of these cost savings came via lower feed bills. In 2018, feed costs were €482/ha and in 2019 they fell by over €80/ha to €400/ha – a 17% drop. A cold, wet spring and a drought stricken summer in 2018 drove feed costs through the roof.

Fertiliser and lime costs fell by 14%, veterinary fees fell by 5% and contractor costs by 7%. These cost reductions would have been expected given the favourable conditions of 2019.