The Numbers Game

The recent spell of good weather was long overdue, and not just in meteorological terms. Farmers across the country have spent the last few weeks making silage and hay in glorious sunshine. One can only hope that this year, as a whole, will be a better one for farmers.
Last year's prices were on the floor, and the effects of this are clear for all to see in black and white in the Teagasc 2009 National Farm Survey. According to its fi gures, full-time commercial farms saw their income fall by, on average, 35 per cent, while part-time farm incomes dropped by 13 per cent.
It's quite clear that, in many cases, farmers are not covering their costs, but using the Single Farm Payment (SFP) to subsidise their farm. Cattle rearing is shown, time and again, to be a loss-making enterprise. In 2009, subsidies made up 204 per cent of the income on cattle-rearing farms. The fi gures show that the average cattle-rearing farm had a market-based output worth €13,396, while production costs were €19,125, resulting in a loss of €5,729.
Whatever way you look at the fi gures, they're a long way off the €1,000/ha gross margin that Teagasc is currently holding up as an achievable fi gure from suckler beef production.
Teagasc Director Gerry Boyle said many Irish farms could never generate a viable farm income, not to mind a gross margin of €1,000/
ha, and the logic of why such farmers continue to farm is unknown.
Indeed, logically, it makes absolutely no sense that anyone, who is getting the SFP - or any kind of payment that is, at best, very loosely linked to their farm's output - would continue to throw money at an unviable enterprise. Yet thousands of farmers continue to do so. The Teagasc fi gures show that 55 per cent of cattle farmers, or their spouse, have an off-farm job. You could say it's lucky that cattle rearing enterprises allow for off-farm jobs. However, it just serves to bolster a false economy - using supplementary income to finance keeping cattle.
I recently listened to two part-time farmers chat about their cattle and it was quite clear that, regardless of their individual fi gures, neither farming enterprise was driven by the logic of the bottom line. If we are dependent on the SFP to create an illusion of profi tability in Irish farming and, particularly, a viable beef sector, then logic would suggest we are in for a rude awakening sooner rather than later.