Average dairy farm incomes are expected to rise to over €130,000 in 2022, based on Teagasc’s latest predictions.
According to Teagasc, dairy farms are forecast to achieve higher incomes in 2022 compared to 2021.
Dairy farm incomes
Based on Teagasc’s latest predictions for farm incomes in 2022, a significant increase in income is forecast for dairy farms.
A 30% increase is expected compared to 2021 incomes, with the average dairy farm income expected to reach over €130,000.
A net margin/ha of 22c/L is predicted for 2022, which is an increase of 60%.
Last month, Teagasc released the results from its National Farm Survey, with the average dairy family farm income being €98,745.
Dairy farmers have benefitted from a dramatic increase in milk prices due to the lack of growth in global milk supplies this year.
However, on average, milk production costs are likely to be about 10c/L higher in 2022.
Based on the forecast, the increase in milk price has offset higher feed, fertiliser and fuel expenditure in 2022.
Teagasc is predicting that total milk production costs/L in 2022 could be up by as much as 35% on 2021, reaching almost 36c/L on average.
This is due to fertiliser prices being two to three times higher than in 2021 and feed prices being almost 25% higher than 2021.
It was noted that farms that have a lower reliance on purchased inputs are likely to fare better than farms that have a greater dependence on bought-in inputs.
It was also noted that fixed milk-price contracts will adversely affect incomes on some farms, especially where a high proportion of the milk produced has been sold at the fixed price.
Milk production
Teagasc is also forecasting that in 2022, milk production in Ireland will stall for the first time since milk quota abolition in 2015.
This is mainly due to increased cost of production in 2022, however the dry weather conditions in July and August have also had an impact on Irish milk production and milk production costs in some regions.
Teagasc has noted that this will affect the extent of the income increase experienced on individual dairy farms this year.