The average income for ‘cattle other farms’ (beef/drystock) in 2023 is forecast to increase by 5% to about €19,800, according to Teagasc’s ‘Situation and Outlook for Irish Agriculture – July 2023’ report, released by the state agency on Tuesday, July 25th, 2023.
This increase in income in 2023 can be attributed to higher finished cattle prices, as total production costs are likely to “remain largely unchanged”.
Feed prices, however, remain elevated, although fertiliser prices declined this year, but remain “well above” historical levels.
On an annual basis, total beef production is set to be lower in 2023 relative to 2022.
However, beef production in the third quarter is expected to increase and “possibly surpass” the levels observed for the same period in recent years.
The majority of farms in both cattle systems will continue to benefit from the Fodder Support Scheme introduced by the DAFM in 2022, the report notes.
The report forecasts that Irish finished cattle prices will be 5% higher relative to 2022, while weanling and store prices are forecast to increase by the same percentage relative to last year.
EU beef supply fell by 3.7% in the first quarter of this year relative to the corresponding period last year.
Meanwhile, EU beef supply is expected to be 2% lower in 2023, primarily due to a decline in the size of both dairy and beef cow herds, and EU imports of beef are expected to increase in 2023.
Moreover, EU beef exports are expected to decrease by 5% due to what economists in the report brand as “more competition in high-value markets and higher EU prices”.
The report notes that high inflation, particularly in meat prices, is having a negative impact on consumer demand for meat in the EU and UK.
Challenges
A spokesperson for Teagasc, when publishing the report said: “Agriculture continues to face substantial input price inflation, much of it prompted by Russia’s illegal invasion of Ukraine.”
“Agricultural production costs in 2023 look like they will be little different to the high level experienced in 2022. “
“At the same time, there have been significant negative price movements in some farm output prices, which will reduce margins in 2023. This is particularly the case in the dairy and tillage sectors, which enjoyed record incomes in 2022.”
“While over half the year has passed, making accurate income forecasts across the various farm systems for 2023 remains challenging.”
“Some critical data relating to trends in the volume of input usage and changes in the price of some farm inputs are not readily available at this time,” the spokesperson added.
Income calculations
All income calculations are in nominal terms, according to the authors, which means that they do not factor in general inflation and the impact that this has on the purchasing power of incomes earned in agriculture.
While the rate of general inflation has fallen in Ireland in 2023, it remains well above the ECB target level of 2%.
While many farms, particularly dairy and tillage farms, will experience a decline in nominal income in 2023, even farms with stable nominal incomes in 2023 could still experience a decline in real income if consumer price inflation remains ahead of nominal income growth rates.
In December a further assessment of farm incomes for 2023, along with income forecasts for 2024, will be produced by Teagasc economists.
While over half the year has passed, making accurate income forecasts across the various farm systems for 2023 remains challenging.
Some critical data relating to trends in the volume of input usage and changes in the price of some farm inputs are not readily available at this time.
See more farming news on www.thatsfarming.com
Read: Cattle rearing farm incomes forecast to rise to €10,800 with negative net margin
 in 2023 is forecast to increase by 5% to about €19,800, according to Teagasc.){kind=link}