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HomeDairyDairying in 2022: Teagasc’s outlook on incomes, milk and input prices
Catherina Cunnane
Catherina Cunnane
Catherina Cunnane hails from a sixth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the firm during its start-up phase in 2015.
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Dairying in 2022: Teagasc’s outlook on incomes, milk and input prices

Dairying in 2022 

The Teagasc Outlook 2022, Economic Prospects for Agriculture predicts that fertiliser prices could be 120% above this year’s levels in 2022.

Therefore, with this “substantial” increase, it anticipates lower fertiliser use among farmers in 2022.

The report states that even with “normal” weather conditions in 2022, feed use per head on Irish dairy farms is expected to rise by about 7%. The state agency cited the high price of fertiliser and expected fall in usage as the main reasons for this.

Furthermore, it expects feed prices to increase by 6%. Also, it predicts a 16% hike in fuel prices due to an increased carbon tax.

Overall, the report states that the market outlook for dairy farmers is “somewhat uncertain”. It expects the “strong” international dairy demand experienced in Q4 of 2021 to ease in 2022.

However, it expects supply growth in main export regions to be “lower than normal”.

“International dairy prices are expected to remain at an elevated level, but to decrease gradually as 2022 progresses,” the report states.

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Milk prices: Dairying in 2022

Meanwhile, the annual average Irish milk price in 2022 is forecast to be in line with 2021. The report states this would represent an annual average milk price of around 40.6c/L (actual fat and protein VAT inclusive).

“Growth in Irish milk production of just 2% is forecast in 2022, as producers focus on containing cost increases,” the report added.

In 2022, total milk production costs are expected to increase by 15% per hectare and by 13% per litre.

“With output value expected to increase by 2% in 2022, the increase in costs is forecast to lead to lower margins.”

“The forecast average net margin per hectare in 2022 is €1,487. This is a decrease of 20% relative to 2021,” the economists added.

On a per litre basis, the average net margin is forecast to drop by 22% to an average of 11.8c/L.

“A significant decline in income is forecast for 2022, of the order of 16%. However, it should be recognised that this is relative to the anticipated record high incomes in 2021,” the report added.

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