The annual average Irish milk price in 2024 is forecast to improve by approximately 10%, according to the Teagasc Outlook report for 2024 published today (November 28, 2023).
This, according to Teagasc, would represent an annual average milk price of approximately 47.5c/L (actual fat and protein VAT inclusive).
Cost on dairy farms increased significantly in 2022 and remained high throughout 2023.
However, strong milk prices in 2022 softened these increased costs but drops in farm gate milk prices in 2023 resulted in a significant drop in farm incomes.
On average, it is estimated that dairy enterprise net margin/ha fell by 72% in 2023 to €859.
For 2024 it is forecast that total production costs will fall by 2% to reach 36.3c/L.
The average net margin/ha and per litre in 2024 is likely to be up 73% on the 2023 level at €1,477/ha and 12.2c/L.
Dairy
According to Teagasc, the dairy market outlook for 2024 is more positive compared to 2023, with further adjustments in supply and demand expected to bring some improvement in international dairy commodity prices.
However, weak global economic growth may hinder a stronger dairy market recovery.
Teagasc has also predicted that there will be a further easing in production costs across some cost items, such as fertiliser and fuel.
Despite global uncertainty, oil prices are expected to fall further in 2024, with fuel prices forecast to decrease by 4%, on average.
Based on a more normal weather pattern in 2024, feed use/head on Irish dairy farms is expected to remain stable. Feed prices are also expected to remain relatively unchanged (down 1%).
However, overall dairy farms will continue to operate in a high cost environment in 2024.
An improved milk price will mean that margins return to a more sustainable level next year.
Margin
Teagasc noted in its Outlook 2024 report that the recent changes in nitrate regulations is likely to have some influence on national production.
Based on this, Teagasc is not predicting an increase in milk production in its forecast for 2024, with a stable dairy cow population and stable milk yields.
Overall, a return to more normal income levels is envisaged on Irish dairy farms in 2024.
Although production costs look set to remain elevated, an improvement in farm milk prices will boost output value