Average milk price to hold
Overall, profit margins are expected to rise, because of a significant fall in the cost of milk production. Beef farm profitability in 2014 is expected to vary, with those not raising cattle to finish suffering a smaller reduction in prices for the cattle sold. As a result, while margins for cattle finishers are likely to decline despite lower costs of production, margins for cattle rearing farms (and particularly those selling calves and weanlings) should improve in 2014, relative to 2013.
Irish prices lamb in 2014 are forecast to be 4% higher than in 2013. With significantly lower costs of production this year, mid-season lamb profit margins are expected to increase strongly from the low levels of 2013. Better lambing conditions this year should also contribute to higher margins. Pig prices temporarily dipped in the first quarter of 2014, but feed costs were also lower. Teagasc predicts upward movement in prices for the rest of the year, due to greater than anticipated reduction in sow numbers in the EU. “Overall, 2014 should represent a better year for pig producers than 2013,” said Teagasc sources, at last week's publication of National Farm Survey results. In tillage, forward contract prices for cereals declined since April, and 2014 harvest prices are on course to be about 10% lower than in 2013 (assuming delivery of the predicted second highest level of global cereal production ever recorded, which would exceed world demand by 3%).
