Tillage farms received highest direct payments in 2016

Tillage farmers were hit hard in the pocket by a decline in crop yields in 2016 and furthermore by a reduction in the price of cereals. Overall, this has resulted in a 10% fall in average tillage farm income – from €34,303 in 2015 to €30,816.

In terms of borrowings, tillage placed second highest the average borrowings at €80,590, second only to the dairy sector. However, tillage experienced a debt to income ratio of 1.62 times which was quite low when compared to 2.08 on sheep farms, 1.97 on Cattle farms and 1.75 on dairy.

Production

In terms of production, cereal prices and yields both declined year-on-year, by 2% and 10% respectively. It is quite common that the average tillage farm is also host to a significant cattle enterprise and as a result was also hit by lower cattle prices.

Overall there has been an increase in total costs as a result of direct production costs increasing by 4% and overhead costs also increasing by 4%, driven by an increase in conacre rental and land improvement.

In comparison to other farm systems, tillage was the only one to see fertiliser expenditure increase which was largely due to the timing of purchases.

The average gross margin per hectare on tillage farms stood at €1,058

Gross Margins

The average gross margin per hectare on tillage farms stood at €1,058 in 2016, which included a Basic Payment of €348 per hectare. This figure is down from 2015’s €1,161.

In terms of the distribution of incomes on farms, there has been an increase in the proportion of farms between €5,000 and €10,000 – from 5% in 2015 to over 15% of farms in 2016. A decline was seen in the number of farms in the higher income categories of €20,000+.

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Full coverage: National Farm Survey

Average farm income down €2,240 last year