Family farm income increased by 32% in 2011, bringing the average income figure for the farming sector to �24,861, according to a preliminary estimate of the Teagasc National Farm Survey results. Income increases were entirely driven by output gains, as production costs increased and the value of direct payments declined marginally.

Speaking at the launch of the results in Dublin, today, Tuesday, 22 May, Dr Thia Hennessy, Head of the Teagasc National Farm Survey said: �2011 was a very good year for farming with incomes reaching unprecedented levels as farmers benefited from the favourable market conditions for dairy and beef products.� She also stressed that �while the increase in farm incomes of 32% in 2011 is substantial, it should be borne in mind that this is likely to represent a short-lived spike in income as indications from global markets are that commodity prices, especially for dairy products, are already on a downward path.�

�The �24,861 is the average income for the full population of approximately 100,000 farms and this conceals the large variation that exists across the different farming enterprises. Income on the more commercial full-time farms, of which there are about 33,000, was approximately �56,000 in 2011� said Brian Moran of Teagasc�s National Farm Survey. Dairy and tillage farms continue to have the highest farm incomes.

Farm households are not insulated from the continued recession in the wider economy as the number of farm households with off-farm income fell for the fourth consecutive year to 48% in 2011 from close to 60% in 2007. Despite the substantial increase in farm incomes in 2011, only one-third of farms are economically viable farm businesses and almost 37,000 farm households are economically vulnerable, i.e. the business is not viable and neither the farmer nor the spouse works outside of the farm.

The average income on dairy farms increased by 38% in 2011, to �69,617. Dairy farmers benefited from a 15% increase in milk prices and the buoyant beef market improved calf prices. However, these income measures do not include the potential negative effect of a super levy bill. On the back of strong beef prices in 2011, income on cattle rearing farms increased by 50% bringing the average income to almost �11,000. Despite this considerable improvement in income, there are still a large number of small, low income cattle farms that continue to be highly reliant on direct payments. Lamb prices were also up in 2011 and income on sheep farms increased to an average of �17,084 in 2011. While grain markets remained favourable in 2011 and output increased, this was offset by cost inflation, especially in fertiliser and energy, resulting in tillage farm incomes remaining relatively unchanged from the 2010 level.