Teagasc: Farm incomes to rise by 5% in 2016

Family farm incomes could rise by up by 5% in 2016, according to Teagasc economists in their outlook and economic prospects for agriculture in the year ahead.

The say the removal of the milk quota has seen dairy cow numbers rise sharply in Ireland in recent years, so further expansion in milk production is expected in 2016.

Coupled with a modest improvement in milk prices, this should see dairy farm incomes continue to recover.

But they anticipate some of the beef price increase this year will be reversed in 2016, as the supply of animals available increases in Ireland and in the EU generally.

Prospects for the sheep sector are for a continuing increase in prices due to tight global supplies of lamb.

Some recovery in both pig prices and grain prices is also anticipated.

The Teagasc economists indicate that overall family farm incomes are down 9% this year.

Pig prices were down but sheep prices were up.

Tillage sector was down slightly.

Income levels increased across most farm systems, dairy being an exception. Buoyant beef and lamb prices boosted incomes on livestock farms.

However, average farm income still decreased due to the effect of the falling milk price.

“This demonstrates the growing importance of the dairy industry to Irish farming,” said Teagasc economist Thia Hennessy.

The end of the milk quota system has allowed dairy farmers to expand production to partially offset the fall in milk sales resulting from the lower price.

Mainly due to a 9c per litre, or 24%, fall in milk prices, average dairy farm income is estimated to have fallen from around €68,000 in 2014 to €48,000 in 2015, according to Trevor Donnellan, one of the Teagasc report authors.