Farm Economic Viability Report

_Brian

http://www.agriland.ie/farming-news/only-37-of-farms-economically-viable-last-year/

God this is depressing enough reading with only 37% of farms viable and in my own border region this falls to just 18% of farms that are economically viable.

for the border region the future seems bleak with off farm income being essential but unavailable.

The message id take from this I can see is that if I were a younger person hoping to make a life in farming then Dairy is the only hope with more than 70% of dairy farms viable.

patsy_mccabe

Those figures don't even include a full year of lower milk prices. What will the figures be like next year when the full impact of the milk price hits home.
Watching ear To The Ground last night. Irish guy managing a 18K tillage farm in eastern Russia. He says there is huge untapped potential there and the country is not far off self sufficiency as it is.

Farming in Putin's Russia
Farming in Eastern Russia is not for the faint-hearted, but for one Irishman, Noel O'Connor, the opportunity to farm 18,000 hectares was too good to pass up. A long way from his hometown of Malahide, Noel grows sugar beet, sunflowers and wheat on the black alluvial soils of Russia. Running 24-hour shifts and a team of 65 farm workers means constant challenges and Noel works hard to keep the trucks and Combines rolling during the busy spring and harvest seasons.
http://www.rte.ie/tv/eartotheground/

_Brian

Surely scale is a big problem to viability, small holdings just can't make enough to be viable. Even those that run a profitable enterprise just done have enough land to scale up, add to that the problem with marginal lands being farmed and it's just impossible for so many to be viable.

freedominacup

_Brian wrote: »

Surely scale is a big problem to viability, small holdings just can't make enough to be viable. Even those that run a profitable enterprise just done have enough land to scale up, add to that the problem with marginal lands being farmed and it's just impossible for so many to be viable.

What's a small holding? The average farm size here is a very small holding with a very low output/ha.

ganmo

that is very depressing reading

26600 viable livestock farms

pedigree 6

What does viable mean?

For some it means an income of 50k others 30k others 15k others that the farm pays for itself and they have a second job.

ganmo

pedigree 6 wrote: »

What does viable mean?

For some it means an income of 50k others 30k others 15k others that the farm pays for itself and they have a second job.

The article defines it as - family labour paid and 5% return on non land assets

_Brian

pedigree 6 wrote: »

What does viable mean?

For some it means an income of 50k others 30k others 15k others that the farm pays for itself and they have a second job.

I agree but I wonder even how many pay tha national minimum wage for the hours worked.

pedigree 6

_Brian wrote: »

I agree but I wonder even how many pay tha national minimum wage for the hours worked.

But now you have to clarify hours worked.
Is it just tractor work and tending stock or does it include going to the Mart, looking up done deal, fixing tractors/ machinery, discussion groups, reading the farmers journal, posting on internet farming forums etc.

I'm being very pedantic today. :D

freedominacup

ganmo wrote: »

that is very depressing reading

26600 viable livestock farms

And if you allow that those 26600 are the same size as the average dairy farm ie 51-52ha, it puts the average of the remainder at around 20ha. The likelihood is that the 26600 are significantly larger than the average dairy farm which further reduces the average size of the remainder. I wouldn't think a farm of that size has really been viable in the last 100 years.

Waffletraktor

For pedigree*****
Hours worked required to the smooth working of the farm.
Personally for the variety of skills and hours worked would expect the average industrial salaried wage as a bench mark.

ganmo

freedominacup wrote: »

And if you allow that those 26600 are the same size as the average dairy farm ie 51-52ha, it puts the average of the remainder at around 20ha. The likelihood is that the 26600 are significantly larger than the average dairy farm which further reduces the average size of the remainder. I wouldn't think a farm of that size has really been viable in the last 100 years.

and yet we continue to make busy fools out of ourselves

_Brian

pedigree 6 wrote: »

But now you have to clarify hours worked.
Is it just tractor work and tending stock or does it include going to the Mart, looking up done deal, fixing tractors/ machinery, discussion groups, reading the farmers journal, posting on internet farming forums etc.

I'm being very pedantic today. :D

No matter what way you slice or dice it regions like the border region are still in decline post the crash. Casual work that would be classified as "off farm income" is frightfully scarse. Particularly for those in the 50+ bracket, these lads are finding it impossible to get any work at all to supplement their income. The current means testing for farm assist is excessively draconian and many of these lads have no skill base to work from.

pedigree 6

Waffletraktor wrote: »

For pedigree*****
Hours worked required to the smooth working of the farm.
Personally for the variety of skills and hours worked would expect the average industrial salaried wage as a bench mark.

Yea thanks waffletraktor.

The point I'm making is do you know a farmer who switches off altogether?
Maybe you do but the best farmers it's their life and even when inside in the evening's are planning what to do the next day and reading/learning about their trade and planning the next move.

Can't really compare farmers to 9 to 5 office workers. Even look on here there's farmers doing a days work and still talking about farming in the evenings (or on Twitter or Facebook). Nothing wrong with that I consider them the best farmers with a hunger for knowledge.

Anyway there's a point there somewhere.:D

charolais0153

pedigree 6 wrote: »

Yea thanks waffletraktor.

The point I'm making is do you know a farmer who switches off altogether?
Maybe you do but the best farmers it's their life and even when inside in the evening's are planning what to do the next day and reading/learning about their trade and planning the next move.

Can't really compare farmers to 9 to 5 office workers. Even look on here there's farmers doing a days work and still talking about farming in the evenings (or on Twitter or Facebook). Nothing wrong with that I consider them the best farmers with a hunger for knowledge.

Anyway there's a point there somewhere.:D

So are you saying that because someone works in an office, they automatically forget about the paperwork They have to do, the extra work they do when they want a promotion etc. Farmers chose to think about farming, to say they have to
,is utter bull****t

_Brian

Farmer was telling me he's desperate for work and rang about a van driving job.

2am to 10:30 am, three nights a week for minimum wage, it might take a while before you'd be experienced enough to be done by 10:30 but that's all you were paid for. Milk deliveries.

Said he's 52 and only moderate health so couldn't face nights.

rangler1

charolais0153 wrote: »

So are you saying that because someone works in an office, they automatically forget about the paperwork They have to do, the extra work they do when they want a promotion etc. Farmers chose to think about farming, to say they have to
,is utter bull****t

Happen to be out lately with a group that included a civil servant whose very well paid. he was telling us he was just starting three weeks holiday and he's not a teacher. not too many farmers taking a weeks holldays, never mind three weeks and having the weekends off as well.

pedigree 6

charolais0153 wrote: »

So are you saying that because someone works in an office, they automatically forget about the paperwork They have to do, the extra work they do when they want a promotion etc. Farmers chose to think about farming, to say they have to
,is utter bull****t

Never worked in an office paid by someone else so don't know.
But a lot easier to work out hours worked and clock in and clock out.

As for the anyone choosing to think about what they're thinking about. I don't think there's any choice, you're either committed to what you're doing or you just don't care.

If you want to be successful in life you have to be committed to what you're doing but then there's a balance with family. So...?

I think then there's going to be a difference in farmers then say if I put my hours at 8 to 6 and a cow calves at 7pm.
What do I do. Say I'm clocked off and tell the cow to wait till 8 tomorrow. No I go and help her and make sure the calf gets a suck. Or I get a phonecall in the middle of the night that the cows are on the road.
What do I do, wait till morning. No.
There's no choice when you're a farmer.
I can't choose not to or else stock die and crops are lost.

Username John

pedigree 6 wrote: »

Never worked in an office paid by someone else so don't know.
But a lot easier to work out hours worked and clock in and clock out.

As for the anyone choosing to think about what they're thinking about. I don't think there's any choice, you're either committed to what you're doing or you just don't care.

If you want to be successful in life you have to be committed to what you're doing but then there's a balance with family. So...?

I think then there's going to be a difference in farmers then say if I put my hours at 8 to 6 and a cow calves at 7pm.
What do I do. Say I'm clocked off and tell the cow to wait till 8 tomorrow. No I go and help her and make sure the calf gets a suck. Or I get a phonecall in the middle of the night that the cows are on the road.
What do I do, wait till morning. No.
There's no choice when you're a farmer.
I can't choose not to or else stock die and crops are lost.

Hi Ped,

But you have a choice - you could choose not to farm...

I think Charolais is saying that not all 9 - 5 jobs are really 9 - 5. Sometimes there are late evening and then like you say - there is the thinking and planning on your own time...

Farming isn't 9 - 5 - but at the same time - farming is a job you can leave for a while, whereas 9 - 5 jobs can be more rigid... Such as dropibg and collecting the kids from school.

So there are plus and minus with both types of jobs. But to say you have no choice is prob not 100% true... You could probably sell tomorrow move location to find some other job... a lot of 9 - 5 people have to move location to find work - which is often not even considered by farmers...

I don't want this to be a civil service vs farmers thing. Just I think there is a case here of the grass is always greener....

pedigree 6

Username John wrote: »

Hi Ped,

But you have a choice - you could choose not to farm...

I think Charolais is saying that not all 9 - 5 jobs are really 9 - 5. Sometimes there are late evening and then like you say - there is the thinking and planning on your own time...

Farming isn't 9 - 5 - but at the same time - farming is a job you can leave for a while, whereas 9 - 5 jobs can be more rigid... Such as dropibg and collecting the kids from school.

So there are plus and minus with both types of jobs. But to say you have no choice is prob not 100% true... You could probably sell tomorrow move location to find some other job... a lot of 9 - 5 people have to move location to find work - which is often not even considered by farmers...

I don't want this to be a civil service vs farmers thing. Just I think there is a case here of the grass is always greener....

Agree but if you want to be a farmer you have to be committed. When I was doing my greencert work experience the first thing they told me was this is not a 9 -5 job. If you want it to be go home now.
I didn't and I learnt an awful lot and life experience too that stood to me.

_Brian

Many jobs have long and unpredictable hours, work weekends and unsociable hours, this isn't the sole domain of farms or farmers.

The whole system is broken of soo many farms are just unsustainable, I appreciate that some are so because of poor farmer performance but I think the problem is much more to do with the squeeze downward on prices while expenses rise and rise.

Who2

_Brian wrote: »

No matter what way you slice or dice it regions like the border region are still in decline post the crash. Casual work that would be classified as "off farm income" is frightfully scarse. Particularly for those in the 50+ bracket, these lads are finding it impossible to get any work at all to supplement their income. The current means testing for farm assist is excessively draconian and many of these lads have no skill base to work from.

I'd have to disagree here. I do a lot of work around the border regions, there's no labour to be got and the ones that are to be got want extortionate rates. There are plenty of jobs out there at the moment but a lot of lads are too proud to work them.

freedominacup

_Brian wrote: »

Many jobs have long and unpredictable hours, work weekends and unsociable hours, this isn't the sole domain of farms or farmers.

The whole system is broken of soo many farms are just unsustainable, I appreciate that some are so because of poor farmer performance but I think the problem is much more to do with the squeeze downward on prices while expenses rise and rise.

The problem is completely to do with farm size. You're looking at an average size outside of what are classed as viable of 40-50 acres. If prices trebled they would still only have gross outputs of €60,000. This will never be viable either. Extend the period on life support maybe but not viable as a business in this country no matter how you slice it.

kevthegaff

I reckon if you knocked on 10 large scale farmers door you'd come home with a job, Will u be paid/paid well is another question

charolais0153

_Brian wrote: »

Many jobs have long and unpredictable hours, work weekends and unsociable hours, this isn't the sole domain of farms or farmers.

The whole system is broken of soo many farms are just unsustainable, I appreciate that some are so because of poor farmer performance but I think the problem is much more to do with the squeeze downward on prices while expenses rise and rise.

Can is 100€/t cheaper than April 15. Green Barley is 30ish€/t cheaper on other years.

Cattlepen

This is, imo, the most important post I have ever seen on boards. It sums up the way farming is going. Add in the factor of succession or lack of and this is where we are going whether we like it or not.

Grueller

Cattlepen wrote: »

This is, imo, the most important post I have ever seen on boards. It sums up the way farming is going. Add in the factor of succession or lack of and this is where we are going whether we like it or not.

Lack of succession? I work with young people every day and in ruralareas there is no shortage of young lads mad for farming. Price pressure on our produce is the big threat. Succession is no problem if the older generation are willing to facilitate it.

Timmaay

Certainly not an unrealistic prediction 2bh ha. One that I obviously hope won't hold true, but for any major investments I do always make the point of asking will it make economic sense still if I'm forced to pull the pin within afew years!

jaymla627

Given the Irish governments cash cow is trying to be slaughtered by Europe for been a tax haven for mnc's in exchange for lots of high paying jobs and all the other strings and bows along with the Brexit and the unknown of that, I'd be extremely wary of writing of the poor farmer just yet and dismissing what we contribute to the economy
Re forestry grants, one swipe of a pen by civil servant in Brussels can stop these over - night, then your left with a plot of trees that won't generate any meaningful income for 30 odd years....
This economic recovery we are supposedly witnessing is simply been facilitated by Ireland positioning itself as the cayman Islands of Europe and as quick as this money flows into the economy it will be pulled out twice as quick if Apple is made cough up 14 billion in back-taxes, the Irish government is like a one legged man in a ass kicking contest now that the UK is out of Europe and Merkel and co are going to go to town on our company tax rates and all the little loopholes that are used to facilitate the likes of Apple to basically launder money

paddysdream

Hate to break the bad news to you but the buying of farmland has rarely been a viable option from a purely economic point of view ie the return in the vast vast majority of cases will never justify the purchase price.
But has this stopped people from buying in the past ?

To Irish farmers, land, and its acquisition or sale is a activity that has a multitude of facets and economic return is in many cases a minor consideration.

Yes, sub's are being reduced under the latest CAP deal and the outlook for direct payments is not good for the next CAP .But the EU are likely to put more emphasis on "green" and fig leaf"environnmentally good" schemes whilst bringing in tighter and more restrictive regulation's.

The problem for farming and individual farmers with subsidy payments is that the CAP is so large a figure as to look very wrong to many people but spread across the entire EU it ensures cheap,regulated,secure and safe food production.
Individual farmers payments are easily accesible so its easy to see that Johnny down the road got 10k last October but can you look up the names and DED of all the Apple workers whose jobs and incomes have been subsidised both directly and indirectly by the Irish taxpayer over the last 30 years?Many people who look forward to the downfall of rural Ireland and bemoan all us farmers with our EU subsidised lifestyles forget that most of the FDI from big US firms is basically providing nothing to Ireland but jobs paid for by the Irish taxpayer.At least food is essential unlike the "products" produced by Google,Facebook,Apple etc.

The reality check is here a long time and still we survive.Things have vastly changed over the last 30 years with more and more farmers working off farm but even 30 years ago many farmers wives worked and a laying hen was considered a good catch.Its just a role reversal nowadays with the nominal farmer(male) working off farm with a wife etc at home.
With less people emigrating compared to ,say the 1950's, and expectations higher,most farmers nowadays will build a house rather than bringing the wife in to live in the farm house with her in laws.Probably a better idea as 2 families under the one roof could be rather problematic.This of course entails a mortgage etc and two cars etc so therefore not many farms in Ireland could sustain supporting two families.This, I feel, along with higher expectations and better education plus much better jobforce opportunities has led to the massive increase in off farm employment.
The average farm will of course support a family if, no mortgage,no kids at third level,a very frugal and basic lifestyle ie no mobile or sky or broadband ,no debts etc etc ie a 1950's lifestyle.But who wants to live like this in 2016?

Was actually surprised that the viable farm figure was so high to be honest.

Regarding the hours worked;well hard to see how an average Irish livestock farm would need anything like 40 hours a week devoted to it over the entire year.
Either people are very badly organised or they spend half the day faffing about.For example here with a decent amount of ewes and a few cattle would probably spend on average 1 hour a day herding at the moment and other than that what else would anyone be doing with sheep or cattle in July,August.Dosing takes about 2 or 3 hours and thats about once a month.Dipping about 3 or 4 hours and thats once per year.Even to pare a few ewes feet and a blast through the footbath can hardly take all that long.Cattle here all on grass and apart from herding nothing being done with them this time of year.
Fencing shed repair and stuff like that I hear people say.Well hardly takes that much time does it?
Ok do be busy at lambing and in the spring but that's only for 6 to 8 weeks.
This time of year rather busy drawing bales for other people but that's off farm income in my eyes.Been on lot's of farm's over the last month and not that many farmers busy 7 days a week like they like to think.

Rant over(I hope!!!!!)

Cattlepen

Grueller wrote: »

Lack of succession? I work with young people every day and in ruralareas there is no shortage of young lads mad for farming. Price pressure on our produce is the big threat. Succession is no problem if the older generation are willing to facilitate it.

I can only speak for the area around me. There are literally thousands of acres with no successor or no one interested in taking on the farm. And these are substantial farms, handier money and lifestyle else where. Who can blame them?
And is it fair to encourage them to jump aboard a sinking ship?

yosemitesam1

freedominacup wrote: »

The problem is completely to do with farm size. You're looking at an average size outside of what are classed as viable of 40-50 acres. If prices trebled they would still only have gross outputs of €60,000. This will never be viable either. Extend the period on life support maybe but not viable as a business in this country no matter how you slice it.

Size hasn't anything to do with it, only if you insist on producing for the bottom of the market.

freedominacup

yosemitesam1 wrote: »

Size hasn't anything to do with it, only if you insist on producing for the bottom of the market.

I wasn't talking about the bottom of the market. I mentioned prices trebling and you are still looking at turnover of less than €60k. Not a business.

freedominacup

paddysdream wrote: »

The average farm will of course support a family if, no mortgage,no kids at third level,a very frugal and basic lifestyle ie no mobile or sky or broadband ,no debts etc etc ie a 1950's lifestyle.But who wants to live like this in 2016?

Was actually surprised that the viable farm figure was so high to be honest.

)

The average farm is 32.5ha with an average output of under €1000/ha. How does this level of output support a family? In the short to medium term any farm will need an output 10 times higher than this to be close to being able to sustain itself and pay a decent return to the owner. As we've all seen recently profit is not guaranteed year to year.

yosemitesam1

freedominacup wrote: »

I wasn't talking about the bottom of the market. I mentioned prices trebling and you are still looking at turnover of less than €60k. Not a business.

But it is a business if your costs excluding labour are very small and you haven't a couple of hundred thousand tied up in land and sheds, know of a good few lads that are earning a decent living and would come under that, obviously they are not farming cattle...

patsy_mccabe

Why are people so set against part-time farming? I'm the 3rd generation part-time farmer on our land.
I think a lot of the problem is technology has allowed a huge increase in production, not just in farming but manufacturing too. At the same time, there has been a far lesser increase in the demand for these goods. Experts say that world population will increase, from 7 billion at the moment to 10 billion. Aside from the environmental effects, world farming can easily produce for this.

Grueller

patsy_mccabe wrote: »

Why are people so set against part-time farming? I'm the 3rd generation part-time farmer on our land.

2nd generation here. Many neighbours that bemoan part time farming around here are on smaller holdings than I am with less stock and say it cannot be done. It certainly can, but you need to organise yourself and have good facilities.

_Brian

it seems that part time farming is the best route for most lads to stay farming. Gaining regular local flexible work is obviously key. A friend has a job as a caretaker at a local school, about 15 hours a week during the school year and he was joking that he even gets teachers holidays (just unpaid during the summer).

We're the other way round here in that farming is definitely secondary to the core "real job", for
Health reasons I can't farm at a more intensive level. Farm cash completly isolated from personal funds, it has to stand on its own and return a profit, when it's all Muddled up its all to easy for lads to let their jobs sub the farm.

Username John

patsy_mccabe wrote: »

Why are people so set against part-time farming? I'm the 3rd generation part-time farmer on our land.
I think a lot of the problem is technology has allowed a huge increase in production, not just in farming but manufacturing too. At the same time, there has been a far lesser increase in the demand for these goods. Experts say that world population will increase, from 7 billion at the moment to 10 billion. Aside from the environmental effects, world farming can easily produce for this.

The world population is growing all the time - yet farmers are getting less and less in real terms for their goods for a long while...

So the world population argument I think doesn't really help us...

I dont think people are against part-time, its the fact that ag returns are diminishing. Possibly the fact you are part-time, and have been for so long means yo don't have the same contrast as if your father was a full-time farmer, but now the same farm only returns a % of what you need to live on... Maybe its more an optics thing?

patsy_mccabe

Username John wrote: »

The world population is growing all the time - yet farmers are getting less and less in real terms for their goods for a long while...

So the world population argument I think doesn't really help us...

I dont think people are against part-time, its the fact that ag returns are diminishing. Possibly the fact you are part-time, and have been for so long means yo don't have the same contrast as if your father was a full-time farmer, but now the same farm only returns a % of what you need to live on... Maybe its more an optics thing?

I agree totally. I remember my father nearly making 1/2 the industrial wage on our little farm. I'd be lucky to make half that.
In any other business, if you weren't making money you'd just walk away. I think Irish farmers are the worst for this. Too much of a tie to the land. Sad to be producing such a good quality product for a consumer that couldn't care less.

_Brian

patsy_mccabe wrote: »

I agree totally. I remember my father nearly making 1/2 the industrial wage on our little farm. I'd be lucky to make half that.
In any other business, if you weren't making money you'd just walk away. I think Irish farmers are the worst for this. Too much of a tie to the land. Sad to be producing such a good quality product for a consumer that couldn't care less.

We would have a similar profile here..
I wonder where will the diminishing returns curve stop?? or does it just continue and then more and more farms make a loss ???

Username John

_Brian wrote: »

We would have a similar profile here..
I wonder where will the diminishing returns curve stop?? or does it just continue and then more and more farms make a loss ???

But isn't that where we are today?

Don't Teasgasc figures show that for a lot of farms, they eat into the SFP - so in effect, they are operating at a loss?

Where will it stop - one would suspect if the next CAP reform reduces it, to the point where the loss being made from the farm, cant be sustained / offset by the SFP, lads will have to pull pin then...

ganmo

I totally agree, the success(or failure) of part time farming is dependant on what the other job is. Some things on farms have to be done there and then(lamb with maggots for example) and other things need weather. Alot of jobs don't allow you to have that flexibility

The succession problem is an equally big problem. yes you need someone willing to take over but the retiring generation won't hand over the reigns before they're forced to even if there is a willing candidate. So what happens is then the next generation has to cope with an ailing(or death of a) parent + running a farm on top of their job, not a nice position to be in

rangler1

Username John wrote: »

But isn't that where we are today?

Don't Teasgasc figures show that for a lot of farms, they eat into the SFP - so in effect, they are operating at a loss?

Where will it stop - one would suspect if the next CAP reform reduces it, to the point where the loss being made from the farm, cant be sustained / offset by the SFP, lads will have to pull pin then...

The writing has been on the wall for a good few years that we go the way of all the small industries in Ireland....and other oountries too

Username John

rangler1 wrote: »

The writing has been on the wall for a good few years that we go the way of all the small industries in Ireland....and other oountries too

I would agree...

In reality what will this mean - more bigger farmers would seem the obvious answer...

But will there also be more hobby farmers - lads doing a bit cos they have the interest?

patsy_mccabe

That's what most of the farmers around me say, 'Ah, tis only a hobby'.

rangler1

Username John wrote: »

I would agree...

In reality what will this mean - more bigger farmers would seem the obvious answer...

But will there also be more hobby farmers - lads doing a bit cos they have the interest?

I wouldn't be depending on selling my farm in ten years time to fund my pension......and rents have to take a hammering too.

Username John

patsy_mccabe wrote: »

That's what most of the farmers around me say, 'Ah, tis only a hobby'.

Well, if it is, then they will prob keep doing til they cant afford to do it any longer... Maybe happily subsiding it from the off-farm job...
No reason they shouldn't if they want to either....

Username John

rangler1 wrote: »

I wouldn't be depending on selling my farm in ten years time to fund my pension......and rents have to take a hammering too.

Ah, don't be saying things like that now Rangler... No need for negative talk about rents...

rangler1

Username John wrote: »

Ah, don't be saying things like that now Rangler... No need for negative talk about rents...

Just a scud...did it go off

kowtow

_Brian wrote:

We would have a similar profile here.. I wonder where will the diminishing returns curve stop?? or does it just continue and then more and more farms make a loss ???

I would have thought that CAP reform and similar shocks would prompt a round of consolidation... falling land prices and growing average farm size, a burst of exits and a burst of expansion, followed by consolidation in an attempt to achieve sufficient scale...

Much as we have seen in the last half century, with fewer larger farms at the end of it.

And then the whole merry-go-round will go round again.