Clear impact of price inflation on agricultural incomes - Teagasc

Inflation is hitting the agri sector, but a complete picture of how significant this will be may not become clear until the end of the year.

A new report, by economists at Teagasc, provides an update on the forecast average margins and incomes that will be achieved across the agricultural sector in Ireland in 2022.

Along with other sectors of the economy, Irish agriculture has been hit by substantial input price inflation, much of it prompted by Russia’s illegal invasion of Ukraine. However, there have also been significant price movements in farm output prices over the course of 2022.

New chair elected for Kilkenny and Carlow Education and Training Board

Even though three quarters of the year has passed, making accurate income forecasts across the various farm systems for 2022 remains challenging, as important data relating to the volume of input usage and changes in the price of some farm inputs are not readily available at this time.

Dairy farms are forecast to achieve higher incomes in 2022 compared with last year, while incomes on Cattle Other farms (mainly finishers) are forecast to remain unchanged.

Incomes on Cattle Rearing farms, Sheep farms, Tillage farms and Pig farms are forecast to be lower in 2022.
A significant increase in income in 2022 is forecast on dairy farms, with an increase of 30% or more on the 2021 level now forecast. This increase would take the average dairy farm income figure to over €130,000.

The average income on Cattle Rearing farms is forecast to drop by 17% in 2022, as higher production costs should more than offset the benefit of higher cattle prices. This would bring the average Cattle Rearing farm income back to about €9,000 in 2022.

The average income for Cattle Other farms in 2022 is forecast to be unchanged at about €17,000.

Sheep farms will have benefitted from higher lamb prices in 2022, a year in which lamb prices still remained well ahead of the five year average price (2017 - 2021), but as with other farm enterprises, sheep farms have been hit by higher production costs. The average income on Sheep farms is forecast to drop by 15% in 2022.

Kilkenny SHC- James Stephens battle their way back to the county final

James Stephens 2-18 Dicksboro 1-18

In the Tillage system, favourable weather during the growing season in 2022 meant that Irish cereal yields were up for many crops compared to 2021. There were some notable exceptions on the yield front, with disappointing winter barley yields in some regions attributed to virus impacts.
Favourable weather conditions at harvest time will have also benefited moisture contents and crop receipts.

The tight global grain markets has also resulted in higher cereals prices. However, the rise in production costs on Tillage farms has been substantial. The average Tillage farm income is forecast to fall by somewhere close to 10%.

It has been a very challenging couple of years for pig farmers. Low pig prices have coincided with the sharp increase in feed and energy costs, pushing producers into negative margin territory.
Pig prices have risen gradually over the course of 2022 and the extent of the increase in now large enough to begin to restore profitability in the sector. Nevertheless the average pig farm will have incurred losses approaching €350,000 in 2022.
To read the full publication ‘Situation and Outlook for Irish Agriculture’ - September 2022 - visit www.teagasc.ie

Update issued by Kilkenny County Council on Draft Masterplan for Loughmacask

PICTURED ABOVE: Pictured on the Teagasc stand at the National Ploughing Championships were Prof. Frank O’Mara, Teagasc Director, and Liam Herlihy, Teagasc Chairman, with Martin Heydon, Minister of State with responsibility for Farm Safety at the Department of Agriculture, Food and the Marine, at the launch of an investment of €1.2m in 18 farm machinery simulators for use in Teagasc agricultural colleges. Photo O’Gorman Photography