Teagasc forecasts that the average income on cattle-rearing farms will rise by 15% in 2023 to bring the average income to circa €10,800.
This forecast increase is partly due to the introduction of both the Suckler Carbon Efficiency Programme (SCEP) and the Agri-Climate Rural Environment (ACRES) scheme, according to the ‘Situation and Outlook for Irish Agricultural – July 2023’ report released by the state agency on Tuesday, July 25th, 2023.
Mart prices, according to Teagasc economists, are expected to be “slightly higher” in the autumn of 2023.
However, elevated feed prices and overhead costs mean that the average net margin (profit exclusive of direct payments) on cattle-rearing farms could “remain negative in 2023”.
As per Teagasc’s definition, a cattle-rearing system “refers to those farms where the greater proportion of the farm’s activity relates to suckler-beef production”.
In December 2022, Teagasc published its annual ‘Situation and Outlook for 2023’.
This mid-year assessment published in July 2023 takes on board developments in the first half of 2023 to provide a revised assessment of the likely outcome for the year as a whole.
The report, by economists at Teagasc, provides an update on the forecast average margins and incomes which are likely across the agricultural sector in Ireland in 2023.
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.
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.
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