Prices for both cattle and milk are set to increase in 2024, while input prices on the whole are set to decrease next year, according to economists at Teagasc.
Teagasc’s Outlook 2024 Economic Prospects for Agriculture, published today (Tuesday, November 28) outlines trends that can be expected next year in farm incomes, costs, and prices to farmers.
The reduction in input prices that has emerged in 2023 should persist into 2024, meaning that input costs for 2024 as a whole should be lower than in 2023.
A large drop in fertiliser prices is forecast in 2024. Smaller reductions in energy prices and feed prices are anticipated.
However, overhead costs are set to remain relatively unchanged on the 2022 level.
As general inflation slows, increases in the price of other input items should return to a more normal level, Teagasc said.
Milk prices
Irish milk prices are likely to rise in 2024 by 10%, as global milk production growth slows and demand growth improves. The average milk price for 2024 should increase to just under 48c/L.
Margins for dairy farmers in 2024 should improve as producers also benefit from a slight drop in production costs. The forecasted average dairy farm income in 2024 of €86,000 would represent a 46% increase on the estimated income level for 2023, which is €59,000.
Cattle prices
For cattle prices, the forecast is for a 3% increase in both finished cattle prices and young cattle prices in 2024 relative to 2023, while production costs are also expected to ease slightly.
Average incomes are forecast to rise on cattle farms in 2024, with an increase of 12% in prospect for cattle rearing farms to €11,500 (from €10,300 this year), and an increase of 8% for other cattle farms (mainly finishers) to €20,100 (from €18,600 in 2023).
Lamb prices
Lamb prices in 2024 are forecast to remain at the 2023 level. With a forecast for declines in production costs, coupled with additional supports for the sheep sector, the average income on sheep farms in 2024 is forecast to increase by 8% on 2023, bringing the average income to about €18,300 (up from €17,000 this year).
Cereal prices are forecast to be marginally higher at harvest 2024. Under the assumption that expected yields are achieved, yields in 2024 would be up on the 2023 level.
When the forecasted reduction in production costs for next year is taken into account, the average tillage income is forecast to increase by over 60% to €50,000 (up from €30,000 in 2023).
Pig prices
Irish pig prices are forecast to continue to decrease in 2024 by 11%, while a small drop in production costs is also expected.
Irish pig production is forecasted to increase slightly in 2024, and the margin over feed should drop to 61c/kg.
Across all sectors, the average farm income in 2024 is forecasted to increase by 30% to €32,200 (up from around €24,800 in 2023). This increase will be largely driven by the increases in the dairy and tillage sectors.
Teagasc
Teagasc highlighted that all these income calculations are in nominal terms, meaning that they do not factor in general inflation and the impact that this has on the purchasing power of incomes earned in agriculture.
While the general inflation rate in Ireland has fallen to 5% in Ireland in 2023, it remains will above the European Central Bank (ECB) target level 2%.
In 2024, farms could still experience a decline in real income if consumer price inflation remains ahead of nominal income growth rates.