Teagasc seeing strong growth for dairy farms

TEAGASC forecasts very strong growth in dairy incomes, with broadly stable incomes forecast for drystock and tillage systems.

The prediction is contained in Teagasc's mid-year commentary on the economic performance of Irish agriculture in 2017. 

Costs of production on farms have entered a benign period, with prices for feed, fertiliser and fuel well below the levels seen during the commodity prices boom earlier in the decade. 

Aside from fuel prices, which are likely to average higher than in 2016, there are no signs of imminent production cost inflation in the agriculture sector in Ireland, the review says.

 Irish farm milk prices have rebounded strongly over the last 12 months. Having been at their lowest level since 2009, milk prices are now back to 33 cent per litre and are providing the impetus for a continuing increase in milk production, which could be up by 7% nationally in 2017 relative to last year.  

With recovering milk prices, higher milk production and a static cost environment, average dairy farm margins could double in 2017. Average dairy farm incomes are forecast to increase to between €75,000 and €80,000 in 2017, which would make it a record year for dairy farm income.

 In the case of beef, the larger Irish cattle population is contributing to an increase in beef output this year, although slaughter weights are down slightly due to the increasing presence of dairy genetics in the national herd.  In spite of the weakness of sterling, strong demand for beef at EU level and growth in exports to non-EU markets should lead to a small increase in prices.