Organic Production Research Conference

Tullamore, 2nd December 2008

FINANCIAL PERFORMANCEOF ORGANIC FARMING

L. Connolly J. McDonnell

B. Moran

Organic Production Research Conference

Tullamore, 2nd December 2008

OUTLINE

Background

Methods

Farm Numbers

Technical Details

Financial Results

Socio-Economic Data

Conclusions

Organic Production Research Conference

Tullamore, 2nd December 2008

OBJECTIVE

Compare Financial & Technical Performance

of Organic Cattle Rearing and Dairy Farms to

Conventional Farms

Organic Production Research Conference

Tullamore, 2nd December 2008

METHODS

Organic Farm Data : Suckler & Dairy Farms Participating in Organic Monitor Farm Project

Conventional Farm Data : Suckler & Dairy farms in Teagasc National Farm Survey

All Data Recorded/Analysed on NFS Recording & Analysis System

Organic Production Research Conference

Tullamore, 2nd December 2008

Irish Organic Farm Numbers and Area Farmed 1995-2008

300

897852

9781104 1102

1230

0

5

10

15

20

25

30

35

40

45

50

1995 2000 2004 2005 2006 2007 2008

00

0 H

a

0

200

400

600

800

1000

1200

1400

Fa

rms

Area Farms

Organic Production Research Conference

Tullamore, 2nd December 2008

Irish Organic Farm Numbers and Area Farmed 1995-2008

30.67

35.26

27.23

6.4

39.9439.24

44.6

300

897852

9781104 1102

1230

0

5

10

15

20

25

30

35

40

45

50

1995 2000 2004 2005 2006 2007 2008

00

0 H

a

0

200

400

600

800

1000

1200

1400

Fa

rms

Area Farms

Organic Production Research Conference

Tullamore, 2nd December 2008

Land Use – Organic v Conventional Cattle Rearing 2007

Organic Conventional

Ha

Land farmed 34.6 27.8

Pasture 20.3 16.5

Forage 6.7 7.2

Tillage crops 0.2 0.2

Rough grazing 3.6 2.8

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Livestock Units on Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

Livestock Units

Cattle 16.8 28.2

of which Suckler Cows 11.1 16.8

Sheep 0.2 1.0

Total 17.0 29.4

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Stocking Rate on Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

Stocking Rate LU/HA 0.50 0.95

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/Farm

Gross Output 23,292 25,518

of which Direct Payments 17,883 12,763

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/Farm

Gross Output 23,292 25,518

of which Direct Payments 17,883 12,763

Direct Costs 3,504 7,696

Gross Margin 19,788 17,822

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/Farm

Gross Output 23,292 25,518

of which Direct Payments 17,883 12,763

Direct Costs 3,504 7,696

Gross Margin 19,788 17,822

Overhead Costs 4,813 10,120

Family Farm Income (FFI) 14,975 7,702

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/Farm

Gross Output 23,292 25,518

of which Direct Payments 17,883 12,763

Direct Costs 3,504 7,696

Gross Margin 19,788 17,822

Overhead Costs 4,813 10,120

Family Farm Income (FFI) 14,975 7,702

T. Costs % Output 35% 70%

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/ha

Gross Output 673 917

of which Direct Payments 517 459

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/ha

Gross Output 673 917

of which Direct Payments 517 459

Direct Costs 101 278

Gross Margin 572 641

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Selected Financial Data For Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/ha

Gross Output 673 917

of which Direct Payments 517 459

Direct Costs 101 278

Gross Margin 572 641

Overhead Costs 139 364

Family Farm Income (FFI) 433 277

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Direct Payments On Organic and Conventional Cattle Rearing Farms - 2007

Organic Conventional

€/Farm

Direct Payments 17,883 12,763

of which *SFP 5,740 7,990

*REPS 9,163 2,649

*DAS 2,980 2,115

Source: National Farm Survey

*SFP – Single Farm Payment; *REPS = Rural Environmental Protection Scheme;

*DAS = Disadvantaged Area Compensatory Scheme

Organic Production Research Conference

Tullamore, 2nd December 2008

Socio-Economic Data Organic Suckler Farms 2007

Organic Conventional

Age Farmer 50 54

Married (%) 72 65

Off-Farm Income (%Holders/Spouse) 65 62

Demographically Viable (%) 92 75

Labour Units 1.14 0.95

Source: National Farm Survey

Organic Production Research Conference

Tullamore, 2nd December 2008

Organic Conventional

€/Ha

Gross Output 2,646 2,850

of which Direct Payments 484 434

Source: National Farm Survey

Financial Data Organic Dairy Farms 2007

Organic Production Research Conference

Tullamore, 2nd December 2008

Organic Conventional

€/Ha

Gross Output 2,646 2,850

of which Direct Payments 484 434

Direct Costs 708 923

Gross Margin 1,938 1,927

Source: National Farm Survey

Financial Data Organic Dairy Farms 2007

Organic Production Research Conference

Tullamore, 2nd December 2008

Organic Conventional

€/Ha

Gross Output 2,646 2,850

of which Direct Payments 484 434

Direct Costs 708 923

Gross Margin 1,938 1,927

Overhead Costs 734 800

Family Farm Income (FFI) 1,204 1,127

Source: National Farm Survey

Financial Data Organic Dairy Farms 2007

Organic Production Research Conference

Tullamore, 2nd December 2008

CONCLUSIONS

Number of Irish organic farms low v EU

Technical efficiency – lower on Organic Farms

FFI/Ha - higher on Organic Farms

- lower production costs

- higher subsidies

Organic - higher Labour

- more demographically viable