Farm incomes are set to fall in 2026 as milk and cattle prices ease alongside further cost pressures, a new report has said.

Teagasc economists have reviewed the current position in agricultural output and input markets and assessed prospects for Irish farm incomes this year.

As of mid-2026, the outlook for the global economy remains a concern due to the ongoing crisis in the Strait of Hormuz, which has pushed up international oil prices and created increased economic uncertainty, Teagasc said.

Against this backdrop, the outlook for farm incomes in 2026 is weaker than that recorded in 2025, with lower output prices in the dairy and cattle sectors combining with rising input costs to reduce margins across most farm systems.

Averaging across all the main farm systems, family farm income in 2026 is forecast to fall to approximately €33,600, down 38% on the €53,800 average for 2025.

Input markets

Agricultural input markets have been under renewed upward pressure in 2026.

The crisis in the Strait of Hormuz has driven fuel prices higher, while fertiliser prices have also increased on the back of higher energy costs.

As a result, production costs are forecast to rise across all farm systems in 2026, relative to the already high levels experienced in recent years, Teagasc said.

However, farmers will also benefit from the government’s Fuel Income Support Scheme announced in May 2026.

Dairy

Milk prices fell sharply towards the end of 2025 milk production season and have remained at lower levels in the first half of 2026.

It is expected that the average milk prices in 2026 will be down approximately 20% on the average price level achieved over the course of 2025.

Little change in Irish milk production volume is forecast in 2026.

On the plus side, dairy farms will continue to benefit from elevated prices for calves and cull cows.  

Combined with an increase in production costs, lower milk prices are set to sharply reduce margins on dairy farms this year.

Taking all these factors into account, the average dairy farm income in 2026 is forecast to fall to approximately €78,000, down sharply on the record level of €153,300 achieved in 2025, a decline of 49%.

Cattle rearing

The average income on cattle rearing farms is forecast to fall to approximately €19,000 in 2026, down from €24,100 in 2025, a decline of 21%.  

Incomes on cattle other farms (mainly cattle finishers) are forecast to average approximately €21,000, down from €32,800 in 2025, a decline of 36%.  

Cattle prices remain at historically high levels in 2026, but the exceptional prices achieved in 2025 are not expected to be matched this year, Teagasc said in its report.

Weanling prices are forecast to be approximately 10% lower in 2026 than in 2025.

Finished cattle prices are expected to average 8% lower than in 2025.  

Teagasc said this decline in finished cattle prices can be explained by developments in key export markets.

In recent months, beef prices have weakened notably in key EU export destinations including France and Germany.  

The decline in finished cattle prices can also be linked to the increase in beef exports from New Zealand to the UK, which had a direct negative impact on beef prices in the UK during the spring months, with a further impact on beef prices in Ireland.  

While this source of beef trade is expected to decline in the second half of the year, there is an increase in competition from other non-EU countries for the UK beef market.

These factors have reduced margins for cattle finishing enterprises in Ireland.  

With production costs also rising, margins on cattle systems are set to decline.

Sheep

Sheep prices are forecast to be around 3% higher in 2026 relative to 2025.

However, this improvement in output prices is expected to be more than offset by lower margins from the cattle enterprises that are present on many sheep farms and by higher costs of production.

These developments are forecast to leave average income on sheep farms in 2026 at €26,500, 10% lower than the €29,300 recorded in 2025.

Tillage

Grain prices at harvest in 2026 are expected to be broadly similar to those achieved in 2025.

Teagasc said it is still too early to accurately forecast likely crop yields, but with a reduction in tillage area and early yield indications pointing to a decline in yields relative to 2025 harvest, it is expected that total cereal production volume will be down in 2026.

With production costs rising and a decline in the profitability of the subsidiary cattle enterprises operated on many tillage farms, average income on tillage farms is forecast to be well down on the €54,900 achieved in 2025, at approximately €44,000.

On the refined sample of specialist cereal, oilseed and protein farms it is estimated that incomes will also be down, by at least 20%.

Pigs

Teagasc said the Irish pig sector faces a tougher 2026, with weaker prices, rising costs, and lower incomes.

Despite strong profitability in 2023-2025, falling prices and high input costs are expected to cut pig farm incomes by around 45% in 2026 compared to 2025.