The recently published Teagasc National Farm Survey (NFS) 2024 preliminary report provided a useful and interesting insight into machinery costs on Irish farms.
It showed an increase in the use of agricultural contractor services, and a reduction in machinery investment and running costs on Irish farms.
The NFS is carried out annually, whereby the Teagasc economics team collects farm data through the long-established NFS system. It has evolved over the years to produce a comprehensive list of measures relating to farm sustainability, covering economic, social and environmental performance metrics.
The 2024 preliminary results are based on a sample of 818 farms, representing almost 88,000 farms nationally, or 65% of all farms in Ireland.
The data is found under the enterprise costing tables and shows contractor charges under the heading of machinery hire in the direct costs section.
Machinery operating costs are considered separately as overhead costs, and they include machinery depreciation costs and machinery operating costs of which fuel and lubrication oil costs are separated out.
The 2024 preliminary report showed that across all Irish farms the level of spending on agricultural contractor services (machinery hire) increased from €7,340 in 2023 to €7,928 in 2024, a 3.92% rise at a time of continuing inflation in the agricultural machinery input sector. Machinery hire costs are now ranked second highest in direct costs, behind purchased concentrates and higher than fertiliser costs, compared with the 2023 figures, due to a drop in fertiliser prices from the hike in prices in 2023.
Farm costs
Machinery hire costs in 2024 were 16.8% of total direct farm costs, up from 14.61% in 2023. This is the highest level as a percentage of total direct farm costs in the last 10 years.
Agricultural contracting services provided to farmers increased as a percentage of total direct farm costs from 14.61% to 16.80%, a 15% increase. \ Donal O'Leary
When we look at two important enterprises on Irish farms, dairying and tillage, we see that machinery hire costs were €19,938 and €15,777 respectively. On dairy farms this equalled 13.56% of direct costs, while on tillage farms this figure stood at 25.74%. The corresponding figures for 2023 were €17,391, or 11.96%, on dairy farms and €13,958, or 19.1%, on tillage farms.
More recent Teagasc figures from last week’s Moorepark Open Day showed that contractor charges averaged at 3.1c/l between 2020 and 2024, or 9.31% of the cost of producing a litre of milk on Irish dairy farms.
These figures reflect an interesting trend, whereby contractor use by dairy farmers is increasing – possibly reflective of labour availability. The increase in the use of contractor services on tillage farms is more difficult to understand, given the increased machinery investments part-funded by additional TAMS grant aid secured for more machinery investment on tillage farms.
Machinery cost
These machinery cost figures come at a time when the overall direct costs, across all farms, dropped by 6.07%, according to the Teagasc report. 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.
This latest NFS data, when taken against the background of 135,000 farms listed in the most recent Central Statistics Office (CSO) report, equated to an agricultural contractor sector turnover in Ireland for 2024 of €1.07bn, the highest ever recorded.
Machinery depreciation costs across all farms in the NFS dropped in 2024 to €6,738 from €9,065 in 2023. \ Donal O'Leary
When we drill down through NFS data on the machinery overhead costs on Irish farms, we see that in 2024 this figure reduced by 16.9% from €15,623 to €12,977, compared with 2023. This confirms the lower investment levels in new farm machinery and tractors against the background of increased other farm costs.
Machinery depreciation costs across all farms in the NFS dropped in 2024 to €6,738 from €9,065 in 2023. Separately, machinery operating costs also reduced to €6,239 from €6,558. Combine these and you find that total machinery overhead costs dropped from €15,623 to €12,977, a reduction of 16.9% in costs between 2023 and 2024.
This meant that machinery overhead costs as a percentage of total overhead costs on Irish farms dropped from 37.04% to 34.29%, a very significant reduction, as a balance against the increased use of agricultural contractor services.
When we look at what happened on dairy farms, the NFS data showed that total machinery overhead costs dropped from €33,195 to €31,233 between 2023 and 2024, a drop of 5.9% in costs. The biggest part of this decrease is due to reduced depreciation costs.
On tillage farms the NFS data shows that total machinery overhead costs dropped from €37,301 to €25,837 between 2023 and 2024, a very significant drop of 30.7%. This latter figure reflects an ageing fleet of machinery in the tillage farming sector in Ireland, at a time when there is Government ambition to increase the tillage farming area in the country.
Conclusion
The overall results of the NFS preliminary report showed that the nature of farm mechanisation on Irish farms is changing, with increased dependence on agricultural contractor services.
Now ranked second highest in direct costs, behind purchased concentrates and higher than fertiliser costs, compared with the 2023 figures.
\ Odhran Ducie
Irish farmers have been more cautious in terms of machinery investments up to 2024, while there is some evidence that they started to re-invest in machinery in 2025, as farm incomes are showing improved levels of profitability.
The recently published Teagasc National Farm Survey (NFS) 2024 preliminary report provided a useful and interesting insight into machinery costs on Irish farms.
It showed an increase in the use of agricultural contractor services, and a reduction in machinery investment and running costs on Irish farms.
The NFS is carried out annually, whereby the Teagasc economics team collects farm data through the long-established NFS system. It has evolved over the years to produce a comprehensive list of measures relating to farm sustainability, covering economic, social and environmental performance metrics.
The 2024 preliminary results are based on a sample of 818 farms, representing almost 88,000 farms nationally, or 65% of all farms in Ireland.
The data is found under the enterprise costing tables and shows contractor charges under the heading of machinery hire in the direct costs section.
Machinery operating costs are considered separately as overhead costs, and they include machinery depreciation costs and machinery operating costs of which fuel and lubrication oil costs are separated out.
The 2024 preliminary report showed that across all Irish farms the level of spending on agricultural contractor services (machinery hire) increased from €7,340 in 2023 to €7,928 in 2024, a 3.92% rise at a time of continuing inflation in the agricultural machinery input sector. Machinery hire costs are now ranked second highest in direct costs, behind purchased concentrates and higher than fertiliser costs, compared with the 2023 figures, due to a drop in fertiliser prices from the hike in prices in 2023.
Farm costs
Machinery hire costs in 2024 were 16.8% of total direct farm costs, up from 14.61% in 2023. This is the highest level as a percentage of total direct farm costs in the last 10 years.
Agricultural contracting services provided to farmers increased as a percentage of total direct farm costs from 14.61% to 16.80%, a 15% increase. \ Donal O'Leary
When we look at two important enterprises on Irish farms, dairying and tillage, we see that machinery hire costs were €19,938 and €15,777 respectively. On dairy farms this equalled 13.56% of direct costs, while on tillage farms this figure stood at 25.74%. The corresponding figures for 2023 were €17,391, or 11.96%, on dairy farms and €13,958, or 19.1%, on tillage farms.
More recent Teagasc figures from last week’s Moorepark Open Day showed that contractor charges averaged at 3.1c/l between 2020 and 2024, or 9.31% of the cost of producing a litre of milk on Irish dairy farms.
These figures reflect an interesting trend, whereby contractor use by dairy farmers is increasing – possibly reflective of labour availability. The increase in the use of contractor services on tillage farms is more difficult to understand, given the increased machinery investments part-funded by additional TAMS grant aid secured for more machinery investment on tillage farms.
Machinery cost
These machinery cost figures come at a time when the overall direct costs, across all farms, dropped by 6.07%, according to the Teagasc report. 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.
This latest NFS data, when taken against the background of 135,000 farms listed in the most recent Central Statistics Office (CSO) report, equated to an agricultural contractor sector turnover in Ireland for 2024 of €1.07bn, the highest ever recorded.
Machinery depreciation costs across all farms in the NFS dropped in 2024 to €6,738 from €9,065 in 2023. \ Donal O'Leary
When we drill down through NFS data on the machinery overhead costs on Irish farms, we see that in 2024 this figure reduced by 16.9% from €15,623 to €12,977, compared with 2023. This confirms the lower investment levels in new farm machinery and tractors against the background of increased other farm costs.
Machinery depreciation costs across all farms in the NFS dropped in 2024 to €6,738 from €9,065 in 2023. Separately, machinery operating costs also reduced to €6,239 from €6,558. Combine these and you find that total machinery overhead costs dropped from €15,623 to €12,977, a reduction of 16.9% in costs between 2023 and 2024.
This meant that machinery overhead costs as a percentage of total overhead costs on Irish farms dropped from 37.04% to 34.29%, a very significant reduction, as a balance against the increased use of agricultural contractor services.
When we look at what happened on dairy farms, the NFS data showed that total machinery overhead costs dropped from €33,195 to €31,233 between 2023 and 2024, a drop of 5.9% in costs. The biggest part of this decrease is due to reduced depreciation costs.
On tillage farms the NFS data shows that total machinery overhead costs dropped from €37,301 to €25,837 between 2023 and 2024, a very significant drop of 30.7%. This latter figure reflects an ageing fleet of machinery in the tillage farming sector in Ireland, at a time when there is Government ambition to increase the tillage farming area in the country.
Conclusion
The overall results of the NFS preliminary report showed that the nature of farm mechanisation on Irish farms is changing, with increased dependence on agricultural contractor services.
Now ranked second highest in direct costs, behind purchased concentrates and higher than fertiliser costs, compared with the 2023 figures.
\ Odhran Ducie
Irish farmers have been more cautious in terms of machinery investments up to 2024, while there is some evidence that they started to re-invest in machinery in 2025, as farm incomes are showing improved levels of profitability.
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