Every month, the Central Statistics Office (CSO) releases a data set titled 'Agricultural input and output price indices'.

The numbers published are not the actual costs of things farmers buy or the actual prices they receive for their produce.

They are, instead, a reflection of how much those costs and prices have changed from month to month and year to year.

Looking at Figure 1, we can see the full history of the dataset from January 2014 up to October of this year.

The line for output price (what farmers are paid) and the line for input prices (the costs farmers face) generally track fairly close to each other across the time period.

This is not to say incomes and costs are generally the same - rather that they generally change by the same amount.

However, the two lines deserve closer examination. The difference between input and output prices in any month can be viewed as a proxy for farm profitability - as highlighted in Figure 2.

This chart calculates the difference in the change in input prices and output prices. Until mid-2022, those changes were generally fairly small.

However, there was a significant spike higher in the positive difference in late 2022, meaning earnings were firmly on the front foot.

However, for much of 2023, the difference has been negative, meaning - no surprise to anyone - farm profitability has been falling this year.

The reading for September was positive and for October was only slightly negative, despite that month traditionally being one of the worst months for cost increases.

While it is very early days, we might be seeing the emergence of a trend where prices will again start to grow faster than costs, which in turn would mean an increase in farm profitability in 2024.