Farm costs continue their slow decline

Central Statistics Office (CSO) numbers for farm input and output prices published on Monday 15 July show that the 2024 trend of falling costs for farmers continues at a slow pace.

The agricultural input cost index is 1.4% lower when compared with April and 10.4% lower than May 2023.

By far the biggest drivers of the annual drop were fertiliser and electricity prices.

Among the few costs that increased in between April and May were pesticides, services and maintenance prices.

Overall, the level of agricultural costs stands more than 25% above the January 2021 level.

Biggest drop

When it comes to what farmers are paid for their produce, the biggest drop in the last year was cereals, while the biggest rises were in potato and sheep prices.

Milk prices were 4.9% higher than a year ago, while cattle, pig and poultry prices were all down on their May 2023 level.

Overall, output prices have only increased by 1.1% in the past 12 months.

Data from the Irish Farmers Journal on market prices shows that sheep prices dropped significantly in recent weeks, while milk prices may continue their slow increase, even as volumes remain significantly below 2023 levels.

Overall, 2024 so far has been notable as the first period in several years where the prices paid to farmers are rising faster than the costs they have to bear.

However, coming on the back of several years of extreme cost pressure on farming, it is likely that this trend would have to continue for some time before farmers feel the full effect of lower prices.