Teagasc: Dairy income to fall 40% but outlook mixed

It will be another year of mixed fortunes in Irish agriculture, according to a mid-year Teagasc assessment of the sector.

Drystock producers, who ordinarily have relatively low incomes, will see their farm profits increase in 2015.

Incomes on cattle finishing and single suckling farms are likely to rise by 20% and 30% respectively. By contrast, dairy farmers who normally record the highest incomes, will see their farm profits fall.

The average dairy farm income is likely to be down 40% from the €67,000 average recorded in 2014. Overall, the average family farm income is likely to drop by about 15% from 2014, leaving it in the €22,000 to €23,000 range.

Teagasc says prices in beef and sheep have been positive. Meat demand in the EU is stronger due to the economic recovery. Exchange rates have also helped. Calf and weanling prices have moved strongly upward this year, as have finished beef animal prices.

The weaker euro has made Irish beef exports to Britain more lucrative and Irish lamb now competes with British lamb in France.

While the harvest is lagging a few weeks behind normal, indications are that Irish grain yields in 2015 will be above normal. Demand should see grain prices rise 5% to 10% from 2014.

Margins on tillage farms should be on a par with last year. In dairy production, the average Irish milk price is likely to be around 28c per litre (Vat inclusive), down from 39c per litre in 2014.

Production costs will be close to 25c per litre. Direct payments to dairy farmers, which average about €20,000 annually, will be a buffer, as will higher 2015 dairy calf prices. The report was prepared by Trevor Donnellan, Kevin Hanrahan, Thia Hennessy, and Fiona Thorne.


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