The average tillage income in Ireland is expected to decrease by 50% in 2023 according to the latest report from Teagasc.
The organisation has today (Tuesday, July 25) published its mid-year Situation and Outlook for Irish Agriculture for 2023.
The average tillage farm income in 2023 is expected to be approximately €37,000, which represents a decline of 50% on the 2022 level, according to Teagasc.
Tillage
Indicating a negative outlook for 2023, the Teagasc report states that with lower output prices for cereals, coupled with a decrease in production volume, Irish cereal output value is forecast to be down significantly in 2023.
According to the report, the Straw Incorporation Measure, Tillage Incentive Scheme and Organic Farming Scheme will boost output value in certain circumstances.
Total production costs in 2023 are forecast to decrease, but “this drop will be small in magnitude compared to the decline in output value”.
Input costs
The report states that in 2023, there has been a decrease in some cost items, while other costs have continued to increase.
Cost decreases have occurred for key items such as fertiliser and fuel.
Increases in seed costs, electricity and plant protection products (and feed on specialised tillage farms with a subsidiary livestock enterprise) are the main items of concern.
Overall, it is forecast that total costs on the average tillage farm in 2023 will be down by less than 10% compared to 2022.
Wheat and other markets
EU soft wheat production in 2023/2024 is expected to be 126.2Mt, which is slightly up on 2022/2023.
While the EU harvest is now in full swing, latest trade forecasts are that EU wheat production could decrease depending on how weather evolves and crops ultimately perform.
EU demand for human, industrial and feed use is expected to increase only very slightly by 0.1Mt year on year.
EU ending stocks are still expected to be relatively high in 2023/2024, at 12.4Mt, according to the report.
Overall EU barley production is estimated at 47.1Mt in 2023/2024 compared to 51.3Mt in 2022/2023. Excessive spring humidity in Europe is reported to be the cause of lower yields.
EU maize production is estimated to increase in 2023/2024 to 60.8Mt (compared to 52.1Mt in 2022/2023).
World grain markets are subject to decreasing global harvests on the one hand and demand undermined by inflation on the other, according to Teagasc.
Crop price formation in EU markets is influenced by competitor crops, “hence supply and demand of all crops must be taken into consideration when making inferences for price formation”.
Prices
Wheat and barley signals at present indicate very large decreases in harvest price in 2023 relative to 2022.
Farmgate ‘on account’ cereal prices on offer in the third week in July are at least 20% lower than prices paid at harvest 2022.
Wet weather conditions at harvest have also meant that moisture bonus payments will negatively impact on grain prices.
Despite the significant decreases mentioned for on account harvest prices, there remains much volatility in the market.
Futures prices for wheat for November 2023 are currently around €265/t at dried prices, with barley trading about €20/t less.