This week, Teagasc released its "Report on the Economic Outlook for Irish Agriculture" for the year ahead. Given the perfect storm of problems confronting farmers this year, few of us have high expectations for farm revenue in 2023. If any of us were feeling optimistic, the Teagasc report may well prove sobering reading, with prices predicted to fall in the tillage and dairy sectors in particular. It was not all doom and gloom, however, with predicted rises in cattle, lamb and pig prices. Unfortunately, these rises are unlikely to be significant enough to counteract rampant inflation in 2023, meaning that we can all expect a lean year.
Here is a brief look at the report’s forecast for each of the sectors:
Lamb
If inflation were not an issue, the outlook for lamb would be generally positive. Teagasc expects that lamb prices will rise by about 2% for the year ahead, but also anticipates that this increase will be undercut by spiralling production costs. Costs could rise by as much as 4% during 2023, which would result in a net decrease in the current average income to below €20,000 per annum.
Not much to cheer about here.
Cattle
On the face of it, the forecast for cattle sales is upbeat. Based on the available data, Teagasc maintains that prices for finished cattle could rise by as much as 4%, with a 5% rise anticipated for young cattle.
The first quarter of the year is likely to be strongest, with a decline moving towards the back end of the year. Overall, this may mean a significant increase in the income of cattle-rearing farms, which could jump by almost €10,000 in some cases. However, the average cattle farm not classified as cattle-rearing may see a significantly smaller rise in income (about 2%).
Overall, then, it appears that cattle farmers can expect to do better than most over the coming year, but production costs will remain an issue.
Tillage
Teagasc predicts a precipitous decline on tillage farms, admittedly from something of a high point in 2022. The forecast outlines a scenario whereby tillage farm incomes could fall by as much as 48%. The numerous provisions set out under the new CAP will not be sufficient to offset rising production costs.
The report does not make for pretty reading from a tillage farmer’s point of view, unfortunately.
Pigs
After a very slow 2022, pig farmers will be hoping for better outcomes in 2023. Surprisingly, the Teagasc report does offer a glimmer of hope to this sector. Based on the available data, pig prices look set to jump by as much as 22% over the course of next year. This would surely be a welcome development for a sector that has endured a very tough run.
Dairy
Dairy farmers are often the envy of every other sector, but the Teagasc report outlines a slight decline in profits during 2022.
However, it expects usual service to resume in 2023, predicting an increase in milk production of about 4%. Crucially, the report finds that average milk prices for the year ahead, while slipping slightly, should be sufficient to cover production cost increases.
