The value of the Irish agricultural contracting sector has now exceeded the €1 billion mark for the first time ever, according to the Association of Farm and Forestry Contractors in Ireland (FCI).

The valuation is based on the latest data from the Teagasc National Farm Survey (NFS) for 2024, which represents around 88,000 farms in Ireland.

The FCI said that Irish farmers increased their spending on agricultural contractor services (machinery hire) from an average of €7,340 in 2023 to €7,928 in 2024.

The association said this represents "a modest 3.92% increase" in cost to farmers, "at a time of continuing inflation in the agricultural machinery input sector".

"Across the 135,000 farms listed in the most recent Central Statistics Office (CSO) [Census of Agriculture 2020] report that equated to a sector turnover in Ireland for 2024 at €1.07 billion.

"It further emphasises the importance of the agricultural contracting sector for the sustainability of a cost-effective agricultural industry in Ireland," FCI said.

The latest NFS report shows that the average cost of machinery hire (contracting) on dairy farms increased by 9% in 2024 to €19,938.

On cattle-rearing farms, contracting expenditure increased by 9% to €4,466 on average, while on cattle other farms (beef finishing or selling store cattle) there was a 14% year-on-year increase to an average of €4,825.

The report shows that contracting charges on tillage farmers at €15,777, were up 16% year-on-year.

The FCI said that overall farm spending on direct costs dropped by 6.07%, according to the Teagasc report.

The association said that this meant that agricultural contracting services provided to farmers increased as a percentage of total direct farm costs from 14.61% to 16.80%, a 15% increase.

The FCI noted that total machinery overhead costs on Irish farms reduced by 16.9% from €15,623 to €12,977, "reflecting how farmers have appreciated the true value that their agricultural contractors can provide".

John Hughes, national chair of the Association of Farm and Forestry Contractors in Ireland, said "FCI members continue to invest in new machinery systems to meet the needs of a modern and technology-driven Irish farming sector".

He added that this is despite the lack of financial support for agricultural contracting from the Department of Agriculture, Food, and the Marine (DAFM) under the Targeted Agricultural Modernisation Scheme (TAMS).

"But unfortunately, DAFM fails to find the necessary mechanisms to support the long-term sustainability of our sector, which the Teagasc NFS 2024 report has now shown, is now providing a more significant input in terms of direct costs on Irish farms, than the fertiliser sector,” Hughes said.