The amount of money farmers spend on farm inputs across most sectors is set to decrease in 2025, according to a new report from Teagasc.
The Outlook 2025 report, which was published yesterday (Tuesday, December 3), provides estimates on farm incomes for 2024, and attempts to forecast how things will progress in 2025.
According to the report, the dairy, cattle (including rearing and finishing), sheep, and pig sectors will see decreases in input spend next year.
Dairy farm inputs
In the dairy sector, feed prices in 2025 will depend in part on cereal prices for Harvest 2025, and more so on the harvest prices paid in 2024.
On a monthly basis there has been a downward movement in feed prices over the course of 2024, with prices in early 2025 set to be lower than at the outset of 2024. Cereal prices at Harvest 2025 are forecast to increase very slightly on 2024 harvest prices.
Averaging across the full year, feed prices are forecast to be a “tale of two halves” according to Teagasc, with a relatively stable story for average feed prices in 2025, compared to 2024.
It is estimated that the volume of dairy feed used in Ireland increased significantly in 2024 on a per head basis due mainly to adverse weather. With the assumption of normal weather in Ireland in 2025, feed volume requirements per head for grassland enterprises would be expected to decline.
With feed use down slightly on Irish farms and with stable feed prices, this will result in a 9% forecast drop in feed expenditure on a per-litre basis in 2025 on dairy farms.
On fertiliser and contracting costs for dairy farmers, Teagasc said it is difficult to anticipate how fertiliser prices might evolve in 2025, as energy prices and trade policy are the subject of uncertainty. For 2025 as a whole, it is forecast that fertiliser prices will decline by 5% on the 2024 level. Fertiliser usage in 2025 is forecast to remain unchanged on the 2024 level.
With fuel prices expected to remain stable, agricultural contracting charges in 2025 are forecast to remain unchanged on the 2024 level. Overall, this means that pasture and forage costs per hectare are forecast to decline by 3% in 2025.
Farm fuel prices, meanwhile, are forecast to be unchanged on the 2024 level, due to a further increase in the Carbon Tax.
Following a significant drop in 2024, electricity prices are forecast to remain unchanged in 2025. This would mean expenditure per hectare on electricity and fuel in 2025 would remain unchanged on 2024.
All inputs considered, at the dairy enterprise level direct costs per hectare are forecast to fall by 3% in 2025, with a 6% reduction on a per-litre basis. Fixed costs for the dairy enterprise are forecast to increase slightly due to the increased value of milk sales. Overall, productions costs per hectare are forecast to remain stable.
Cattle farm inputs
An 11% reduction in the volume of feed used on cattle finishing enterprises is forecast for 2025, while an average 8% decrease in overall feed volume use on suckler enterprises is forecasted.
Those forecasts are based on the assumption of normal weather conditions.
In its 2025 forecast, Teagasc is forecasting that total expenditure on pasture and forage by Irish cattle farmers will be slightly lower relative to the 2024 level, while the price of fertilisers will be slightly lower.
Teagasc is forecasting an increase in other direct costs on cattle farms of 2% in 2025.
Sheep
For the sheep sector, the prices for the majority of the key inputs to sheep production are forecast to either remain relatively constant or decline slightly.
Electricity, fertiliser and concentrate feed prices are just some of the inputs forecast to decrease or remain constant in 2025. Input volumes used in 2025 are forecast to remain relatively unchanged (on a per hectare basis).
Concentrate feed prices are forecast to remain relatively stable in 2025. However, the volume of feed used is forecast to return to more normal use levels owing to less inclement weather conditions, with the volume of feed used forecast to decrease by circa 7%.
Fertiliser usage on sheep farms is forecast to return to more normal use levels. Overall, pasture and forage costs on Irish lowland midseason lamb enterprises are forecast to decline in 2025, by around 9%.
Tillage
Holding all other things constant, fertiliser usage on a whole farm basis in 2025 on crop farms could be expected to increase slightly due to higher levels of winter crop sowing due to autumn weather conditions.
Overall, it can be expected that fertiliser expenditure will be about 5% lower per hectare for specific crops on cereal farms in 2025 relative to the 2024 level.
The increase in crop protection costs in 2025 relative to 2024 is forecast to be of a smaller magnitude to the changes seen in 2024. Assuming no further significant price changes on a monthly basis, from the current prices in November 2024, it is likely that price increases for plant protection products will be about 4% in 2025, on an annual average basis.
Very little change in farm-level fuel prices on tillage farms, on an annual average year basis, is expected, the Teagasc report said.