Teagasc forecasts that sheep farm incomes are to increase marginally by about 5%, to an average of €17,300 in 2023, according to its ‘Situation and Outlook for Irish Agriculture – July 2023’ report published by the state agency on Tuesday, July 25th, 2023.
Some of this increase in income is as a result of the newly introduced agri-environmental scheme, ACRES, with a further boost coming from increased output on sheep farms with a secondary cattle enterprise.
Teagasc outlines that the increase in average production costs will not be offset by output value changes.
It forecasts that the average gross margin per ha on sheep farms in 2023 will remain on par with 2022, with a figure of just over €750/ha.
But, costs of production on Irish sheep farms are forecast to rise in 2023, due to an “escalation” in feed prices, in particular.
Sheep farm incomes
Higher feed prices are expected to lead to an overall increase in feed bills, which Teagasc says will be “somewhat offset” by lower prices for other inputs, resulting in an increase in total costs of production for 2023.
In the report, it points to fertiliser prices, which have declined “slightly relative” to last year, but 2023, to date, has seen higher than 2022 prices for concentrate feed.
The state agency notes that direct costs of production on Irish sheep farms are dominated by concentrate, pasture, and forage costs.
Coupled with “marginally” higher prices at factory level, sheep output value is forecast to remain “modestly positive” for 2023.
Sheep farms have experienced a 5% fall in lamb prices so far in 2023 and, as with other farm enterprises, production costs on sheep farms remain at “elevated” levels.
While EU sheep meat supply is down in 2023, consumption is expected to remain similar to the last year’s levels, resulting in what Teagasc economists have described as a “positive movement in average EU prices”.
The price attractiveness of the EU market is leading to increased imports, particularly from the UK, the report notes.
Irish prices are forecast to stabilise over the second half of the year and for the year, as a whole, are estimated to remain “modestly positive”.
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