The overall income generated by Irish farms is expected to increase by 5% in 2017, according to Teagasc.

In its Annual Review and Outlook for 2017, which was prepared by Teagasc Economists, it shows that the majority of this income increase will come from some recovery in the dairy sector.

The outlook for 2017 is mixed, it says, but a slowdown in global milk production should mean that dairy margins will increase in 2017, with milk prices forecast to be 20% higher.

The volume of milk produced on Irish farms is also expected to increase, it shows, which will provide an additional boost to the the dairy farm’s bottom line.

The rise in milk production is expected to come from rising cow numbers rather than an increase in individual cow yields.

However, things are not all rosy, as the Teagasc Outlook indicates that the beef sector is facing into a difficult year ahead.

Beef supplies are forecast to increase across the EU next year, while the demand for beef is not particularly strong, it says.

All-in-all this is likely to lead to a 10% fall in European beef prices next year.

And given that the UK market is particularly important for Irish beef exports, the weakness of Sterling will also have an adverse impact on beef prices in Ireland, which are forecast to fall by 12%.

Overall, the increase in profitability in the dairy sector in 2017, is forecast to be sufficient to offset a significant decline in beef farm income, it shows.

The work carried out by Teagasc also suggests that any upward movement in Irish cereal prices will be limited.

Many tillage farmers will be hoping for a better year in 2017, but this will depend on the global grain harvest, while high global grain stocks are likely to limit any upward movement in price, it says.