The proportion of sheep farms earning a family farm income (FFI) of less than €5,000 was up six percentage points to 43% in 2023.
This was revealed in the publishing of the Teagasc National Farm Survey 2023, today (Tuesday, July 23).
FFI is the gross output less total net expenses. It represents the total return to the family labour,
management and capital investment in the farm business.
15% of sheep farms reported an income of between €5,000 and €10,000 in 2023, a four percentage point increase compared to 2022.
Sheep farm incomes declined in 2023, by 22% to €12,625, on average.
The proportion of farms earning on average an FFI of between €10,000 and €20,000 remained unchanged year on-year at 18%, with the proportion earning between €20,000 and €50,000 declining by three percentage points to 19%.
The proportion earning an FFI of above €50,000, declined by a similar magnitude in 2023, comprising 4% of farms, on average.
The lowering of income, according to Teagasc, was “driven by a decline in the sheepmeat price and lower production which resulted in a 5% reduction in the value of output”.
The poorer economic performance on sheep farms in 2023 is reflective of a downward trend in FFI in recent years following a record level of FFI in 2021, the survey revealed.
Sheep farms accounted for 16% of the total farm population represented in 2023 and 10% of farm income (€176m).
There were approximately 13,979 sheep farms represented in the survey in 2023.
Gross output on the average sheep farm decreased by 5% to €58,061 in 2023, reflecting
a combination of lower lamb prices and a lower volume of output.
There was a year on-year decline in the proportion of viable sheep farms in 2023, down 12 percentage points to 16% in 2023.
The proportion of sheep farms found to be sustainable was unchanged at 46% in 2023.
The proportion classified as vulnerable increased by 12 percentage points to 39%.
In terms of direct costs, the largest component, expenditure on concentrate feed, increased again in 2023 up 4% to €8,627 on average.
On the average sheep farm, concentrate use was generally unchanged year-on year.
On the other hand, expenditure on purchased bulky feed decreased significantly to €813.
Fertiliser expenditure on the average sheep farm decreased by 22% compared to 2022, to €3,318, on average.
Depreciation costs eased somewhat on sheep farms in 2023, as machinery depreciation decreased by 8% on average, to €4,007, while average building depreciation fell by 37% to €1,966.
Costs relating to land improvement depreciation also decreased. However, building maintenance costs and machinery operating costs each increased by 6% and 5% on
average, to €903 and €3,548 respectively, with land improvement maintenance up 26% to €1,335.
Expenditure relating to car, electricity and phone decreased, by 5% to €3,659. Spending on fuel remained relatively stable at €1,592 on average, with conacre rental costs up 12% to €2,013.
Other overhead costs accounted for €3,637 of the total, up 32% year-on-year.
€286/ha was the average income on sheep farms in 2023, but as the average direct payments/ha were €459/ha, this represented 161% of the percentage direct payments were of FFI.
Direct payments on sheep farms increased by 10% year-on-year to €20,283, on average.
As on the other drystock systems, payments made under the Area of Natural Constraint (ANC) and Agri-Climate Rural Environment Scheme (ACRES) boosted FFI on sheep farms in 2023.
Similarly, the Sheep Welfare Scheme continued to make a significant contribution with an average payment of close to €1,500 in 2023.