The Central Statistics Office published updated figures for farm incomes in 2023, showing that the operating surplus for the sector dropped by 39% last year. When the impact of net interest payments and land rental costs are factored in, income was 49% below the 2022 level, dropping from €4.1bn to €2.1bn.

That precipitous plunge in earnings meant that agricultural income fell to the lowest level since 2014 last year (see Figure 1). This drop in income came despite the end of quotas and the huge increase in agricultural output over the past decade.

In 2015, the year milk quotas were abolished, income was €2.3bn on goods output of €7.1bn, while in 2023 it was €2.1bn from €10.7bn of output. This means that margins in agriculture tightened significantly.

Looking at how much farmers are earning as a percentage of their output, the picture for 2023 becomes even more stark. Income as a percentage of output dropped to 20% last year.

This means that €80 of every €100 of output was used to cover expenses. The average for that figure going back to 1990 is 33.4%.

In the 34 years since then, it only hit 20% on one other occasion – in 2009.

While the fall in milk prices last year was a major driver in the drop in income, the continued increase in input costs significantly reduced on-farm incomes.

The CSO noted that while there was a saving on fertiliser expenses last year, with prices down by a third, there was a 28% increase in seed costs and 11% jump in veterinary fees while prices for crop protection products, maintenance and other services also increased substantially.

The cost of interest payments almost doubled while land rental prices increased by over €80m.

The upshot of all this is that farmers need to get paid more for their output, not in order to increase profit, but rather just to sustain the level of income they were making a decade ago.