Teagasc has predicted that suckler, sheep and tillage farmers are to face reduced farm incomes while it is expecting a “significant increase” in dairy farm earnings in its most recent situation and outlook report.

The incomes of farms mainly engaged in finishing cattle are to remain largely unchanged under Teagasc’s forecast. However, the situation for all other drystock sectors show income declines.

Its analysis predicted that concentrate feed costs will be 25% higher in 2022 on average and that even though grassland farmers cut their fertiliser usage “considerably”, the average farm’s fertiliser bill will have more than doubled on last year’s.

All income commentary was completed on a nominal basis, meaning that inflation masks the spending power of incomes which have stayed the same on paper.

Beef and dairy

Both suckler and finishing herds are predicted to lose in 2022, even factoring in Fodder Support Scheme payments into family farm income calculations.

The gross income on suckler farms will be down by 10%. Weanling prices are 8% higher than 2021 but this is not enough to cover production cost hikes of almost a quarter.

For dairy farmers, the increase in milk prices will more than compensate for higher farm input costs to see the average farm income rise 30% on last year to reach over €130,000.

However, the exception to this rise will be seen by those with a significant proportion of their supply locked into fixed milk price contracts at amounts below non-contracted milk prices.

Sheep and tillage

Sheep farm incomes are predicted to decline as the net margin for mid-season lowland flocks is to fall to €60/ha, the lowest in years.

The fall in lamb prices seen over the latter half of the summer stands out in the Teagasc analysis for the sector.

Lamb prices were 19% higher than the 2021 average on some weeks in May and June but are only set to be 8% higher in the year overall.

Tillage incomes are also set to fall by 10% despite an upwards swing in both prices and yields, but Teagasc noted that the Straw Incorporation Scheme and the Tillage Incentive Scheme will offer a boost to eligible farmers.

Farmer costs in this sector are predicted to rise by 30% this year.

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