The average dairy farm income will be over €130,000 this year, a 30% increase on last year, according to new figures from Teagasc.
Wealthy dairy farmers have benefited from a dramatic increase in milk prices due to the lack of growth in global milk supply this year, and while average milk production costs are expected to be around 10c/ L higher in 2022, thanks to an increase in feed, fertilizer and fuel These expenses will be more than offset by higher milk prices, according to the new Teagasc outlook report.
It also says Irish milk prices in 2022 are expected to be more than 40% higher than in 2021, due to no growth in global milk supply this year.
However, revenues from cattle farms, sheep farms, tillage farms and hog farms are all expected to be lower this year.
Pig farms are in the worst situation, with the average pig farm set to lose up to €350,000 in 2022.
Although pork prices have gradually increased over the course of 2022, this year’s low pork prices, coupled with a sharp increase in feed and energy costs, have pushed pig farms towards a negative margin territory, according to Teagasc.
The average cattle farm is expected to earn around €9,000 in 2022, down 17% from last year, despite the addition of the fodder support scheme. According to Teagasc, rising production costs should more than offset the benefit of higher livestock prices.
The figures show that the average gross margin of a single nursing company in 2022 is expected to decrease by
around 10%, while the average gross margin for cattle finishing farms is expected to increase by 10% in 2022.
The average income of “other cattle farms” in 2022 is expected to remain unchanged at around €17,000.
Sheep farm revenues are expected to fall by 15% and return to €17,700 this year while 2022 was a good year for lamb prices where they remained well above the five-year average.
Good weather during the growing season this year has meant that Irish cereal yields have increased for many crops compared to 2021, but the report’s figures show the average farm holding is expected to be just over the €50,000 mark this year, 10% less than last year.
All of these income calculations are in nominal terms, which means they do not take into account general inflation and its impact on the purchasing power of income from agriculture, according to Teagasc economists.
“With general inflation now at its highest level in many years, a farm with stable nominal income in 2022 will experience a significant drop in real income.”
The report also shows that there has been no increase in overall Irish milk production expected this year, for the first time since milk quotas were abolished in 2015.
A new revenue assessment for 2022 will be made by Teagasc economists in December, along with a forecast for 2023.