Only the top one third of single suckling and cattle finishing will operate a profitable enterprise in 2015 according to the latest Teagasc figures.
In its annual Review and Outlook for 2015, Teagasc said single suckling enterprises in 2014 are, on average, estimated to have earned a negative net margin of €96/ha, while cattle finishing enterprises are estimated to have earned, on average, a negative net margin of €166/ha.
For both single suckling and the cattle finishing enterprises, only the top one third of farmers on average earn a positive net margin ie a profit. The estimated gross margins earned by the bottom one third of both single suckling and cattle finishing enterprises of less than €100 per hectare highlight the un-economic nature of cattle production on many Irish farms.
Looking forward to 2015 Teagasc forecasts that EU supplies of beef are forecast to be stable with weakness in the Eurozone demand likely to partially offset the positive impact of tighter supplies in Ireland and the UK on Irish prices.
According to its report, Teagasc says global beef markets in 2015 will remain relatively tight and imports of beef into the EU are forecast to grow in 2015.
Teagasc forecasts that Irish finished cattle prices to increase by 4% in 2015 relative to the 2014 level with young cattle prices are forecast to grow in line with finished cattle prices.
In terms of production costs, direct costs of production in 2015 are not forecast to dramatically change relative to 2014, with expenditure 3% higher due largely to increases in pasture and forage costs. While input use volumes in 2015 are forecast to remain unchanged on the 2014 levels, expenditure is forecast to increases as a result of increases in fertiliser prices and other direct costs. Expenditure on purchased feed is forecast to be unchanged from 2014.
In 2015, Teagasc says the average net margin per hectare for single suckling enterprises in 2015 is forecast to be -€79, an improvement on the estimated the net margin of -€96 in 2014.
Net margins on average on cattle finishing farms are also forecast to improve in 2015, with the forecast average margin of -€136, lower than the average negative net margin of -€166 per hectare estimated for 2014.