The report indicates that the reduction in input prices that has emerged in 2023 ‘should persist’ into 2024. This includes a ‘large drop in fertiliser prices’ while ‘smaller reductions in energy prices and feed prices’ are anticipated. However, overhead costs are set to remain relatively unchanged compared to 2022 levels. As general inflation slows, increases in the price of other input items should return to a more normal level, the report notes.
As global milk-production growth slows and demand growth improves, Irish milk prices are expected to go up by 10 per cent next year, with the average milk price for 2024 increasing to just under 48c/L. Margins in 2024 should improve as producers also benefit from a slight drop in production costs. The forecast average dairy farm income in 2024 of €86,000 would represent a 46 per cent increase on the estimated income level for 2023.
2023 decline
With the sharp decline in milk prices and with average milk production costs of close to 37c/L in 2023, it is estimated that the average dairy farm income will be down 60 per cent. This decrease would bring the average dairy farm income in 2023 back to €59,000. Irish milk production is expected to be down 1 per cent in 2023 compared with 2022. While dairy cows numbers have increased marginally in 2023, this has been offset by slightly lower milk yields, in the face of low milk prices.
Cattle
Cattle prices are forecast to increase marginally in 2024. The forecast is for a 3 per cent increase in both finished cattle prices and young cattle prices 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, and an increase of 8% for other cattle farms to €20,100.
Lamb
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 per cent, bringing the average income to about €18,300.
Cereals
Cereal prices are forecast to be marginally higher at harvest 2024. Under the assumption that trend yields are achieved, yields in 2024 would be up on the 2023 level. Factoring in a reduction in production costs in 2024, the average tillage income is forecast to increase by over 60 per cent to €50,000.
Pigs
Irish pig prices are forecast to continue to decrease in 2024 by 11 per cent. A modest drop in production costs is forecast. Irish pig production is expected to increase slightly in 2024 and the margin over feed should drop to 61c/kg.
Farm income
The average farm income in 2024, is forecast to increase by 30% to €32,200, but the increase will be largely driven by improved incomes in the dairy and tillage sectors.