The average Irish milk price for 2023 is now likely to be 25% lower than the average for last year, according to a new report.
The figure is contained in Teagasc’s mid-year assessment of its Situation and Outlook for Irish Agriculture for 2023, published today (Tuesday, July 25).
The report shows that the average dairy farm income is expected to be €70,000 in 2023, down from over €150,000 last year.
The average total milk production cost per litre in 2023 is expected to be similar to last year at 36c/L.
This means that the decline in milk prices over the course of this year will determine farm margins.
In 2023, Teagasc said that the average Irish dairy farm should see a net margin of close to 9c/L, a decrease of over 60% on the 2022 level.
Irish milk prices have fallen to a greater extent over the past year relative to other EU countries.
Teagasc said this is “a typical occurrence for the Irish price in a weakening global dairy market”.
No increase in Irish milk production is forecast for 2023 as a whole.
Dairy cow numbers are up marginally and milk yields per cow appear to be down slightly on 2022.
Similar to recent years, Teagasc noted that feed use will continue to increase in 2023. Feed prices are expected to run around 10% higher than 2022.
The report anticipates a reduction of 20% in fertiliser expenditure this year on Irish dairy farms.
Although adverse weather has impacted grass growth, there are no concerns for grass availability and silage production at present.
Milk
Weaker global dairy demand has led to a sharp decline in international dairy product prices in 2023.
Butter and skim milk powder (SMP) prices dropped to €4,600/t and €2,400/t respectively by July of 2023.
Cheddar prices also fell considerably during the first half of this year.
Teagasc said that dairy prices are expected to remain around current levels for the remainder of the year.
The report shows that milk production in New Zealand, the US and the UK is increasing, but is relatively static in the EU.
The level of importation of milk powders by China has fallen relative to 2022.
The challenging cost-of-living situation is also limiting dairy demand growth on the EU market.