Low bar for farm viability

While over half of Irish farms are described as economically viable in Teagasc’s 2025 National Farm Survey, the threshold for viability is not particularly high. Farm viability, for the purposes of the survey, is defined as the farm being capable of providing for the remuneration of family labour at the minimum wage and a 5 per cent return on capital (ROC) invested in non-land assets. That primarily refers to livestock and machinery. There is no ROC expected for land. A minimum-wage employee working full time can hope to take home €24,300 before overtime. That’s hardly a fortune. However, by comparison with a farmer, they deploy no business assets, have no capital invested, and have little or no managerial or decision-making challenges in their roles.
There is another worrying feature from the 2025 farm survey. Are the higher viability figures an aberration or an indicator of a rising tide for farm incomes in the coming years? Last year saw higher livestock prices and high milk prices though not, notably, high grain prices. Even still, two-thirds of tillage farms met the viability criteria, probably helped by a beef enterprise in the background for some. If farmgate prices had remained elevated, then these viability figures could have been expected to remain stable, at least, even at that low base threshold. Unfortunately, in the meantime, farmgate prices have been altered significantly. Milk prices began to drop well before the end of 2025, and though they have stabilised, it is at levels far below the average for 2025, and at or below the critical breakeven figures for most milk production models. Higher calf and cull cow prices have provided a temporary income buffer. Beef finishers, after a positive 2025, which saw their viability figures improve by 18 per cent on the previous year, have just come through a drastic period of price correction in the first half of 2026, with finished cattle prices unable to meet the costs involved in assembling those cattle last autumn and bringing them to slaughter.
Some of the enterprise categories, then, can be expected to match the viability figures for last year. For others, the current expectation is that viability will reduce. Certainly, depending on how far above the threshold an enterprise is or was last year, income levels will fall substantially, unless the closing five months of 2026 bring extraordinarily positive commodity price changes. Most milk production enterprises should maintain viability, albeit at much reduced income levels. For livestock production, across the categories, some measure of viability stability should be maintained. Primary producers – those involved in calf production – are maintaining good returns, while those further along the chain are paying more for calves, weanlings, and stores. The prices are higher, and the margins are getting tighter. The most efficient calf-to-beef producers, as shown on the boards at the Teagasc Grange open day, are capable of making high margins, certainly relative to other cattle production enterprises. Grain production incomes remain in the doldrums, even as the numbers described in the farm survey as ‘vulnerable’ dropped from 16 per cent to 10 per cent last year.
So how are the many thousands of precariously positioned farms managing? The survey provides an explanation. Seventy-six per cent of economically vulnerable farms have a pension coming into the household, often the lower value, non-contributory old-age pension. Without that basic income, the lack of an off-farm job contributing to household income would place many defined-vulnerable farms in an extreme poverty category. Debate around continuing to BISS-fund older farmers must take this stark fact into account.