2013 was a year of contrasting sentiment with bad weather, forage shortages and high feed prices dominating in the first half of the year.
This was followed by a welcome turnaround in the second half of 2013, with better weather conditions.
Looking to what is in store for 2014, the morning session of the Teagasc Economic Outlook 2014 conference examined the short-term prospect for diary, dry stock, cereals, pig and agri-inputs.
Below is a summary outline of the Teagasc review of 2013 and the outlook for 2014.
More reports are to follow on AgriLand.
Review of 2013
Little change in agricultural income, average farm income increasing just one per cent
A late spring adversely affected early season grass growth, exacerbating the impact of the fodder shortage that emerged in 2012.
Consequently high input expenditure was a feature of all the grassland enterprises in 2013, driven by high levels of feed use, high feed prices and a large increase in fertiliser application.
Milk producers and beef finishers experienced an increase in output prices in 2013 that alleviated the impact of these higher feed and fertilisers bills. Dairy margins increased in 2013 due to very high milk prices .
Suckler farmers saw their output prices fall and the increase in input expenditure resulted in a sharp drop in 2013 margins. Beef finishers also faced increased costs but this was offset from
the benefit of higher cattle prices and lower calf prices.
Sheep farmers also saw margins contract in 2013 as their costs of production rose while lamb prices on average were marginally lower than in 2012.
A favourable summer meant that tillage yields for major crops were above normal in 2013, but a large global harvest triggered a steep drop in cereal prices. Tillage production costs were little changed. Consequently, tillage margins were up for some crops and down for others in 2013.
ig producers finally saw upward movement in pig prices in 2013, but also had to deal with elevated feed prices through most of the year. Overall, their margins will have decreased in 2013.
Average family farm income approximately €25,679.
Outlook for 2014
The outlook for 2014 for the Irish agriculture sector as a whole is conditioned by the assumption that the unusual weather of 2012 and 2013 is not repeated in 2014.
Normal weather should see an end to the elevated purchases of feed in the grassland sectors. Aided by lower feed prices, there should be a dramatic reduction in feed bills in 2014 for all grassland enterprises.
Falling fertiliser prices and a reversal of the fertiliser usage spike of 2013 should facilitate a large reduction in fertiliser expenditure in all grassland systems in 2014.
Tillage producers will benefit from lower fertiliser prices and pig producers will face lower feed costs in 2014.
A slight decline in 2014 energy prices is forecast.
Milk prices are expected to be lower in 2014, perhaps by as much as 10 percent.
Beef prices should improve in 2014 and with costs of production falling, margins should be up for all systems, in particular suckler producers.
Sheep prices are expected to improve in 2014 and along with lower production costs this will lead to increased sheep margins.
Stock levels on international grain markets remains at very low levels in spite of the good global harvest in 2013. This means that, yet again, cereal prices will be highly dependent of growing conditions globally. The current outlook is for cereals prices in 2014 to remain steady at the level of 2013 harvest prices. Lower production costs could allow margins to improve but that outcome is contingent on yield levels and if these revert to normal level, then cereal margins in 2014 should be relatively unchanged on the 2013 level.
Pig meat prices are also set to fall in 2014 by about five per cent, but the impact of this on margins this will be offset by falling feed prices.
Overall, average farm income is forecast to increase by 13 per cent in 2014.