Annual income figures have revealed a wide gulf in financial fortunes for Ireland’s farmers, with record dairy highs of €148,000 (£127,000) and pig sector losses averaging €422,000 (£362,000).

The figures were released by Ireland’s agriculture and development body Teagasc in its Economic Outlook for Irish Agriculture report. Overall, the report suggested margins had risen by 25%.

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However, the positive figure masked substantial losses across the livestock sector, with pigs bearing the brunt of high feed costs.

Pigs

Average loss €422,000 (£362,000)

With feed costs up by 34% to €450/t (£387/t), the pig sector was hit hard by soaring grain prices after the Russian invasion of Ukraine. Margins over feed fell to €0.36/kg (31p/kg), down 36% on year earlier levels.

By comparison, pig prices increased by only 14% during the 12 months to October 2022. Sow numbers fell by 8.9% to 133,000.

Outlook

Looking ahead, the report suggests an improved picture for 2023. Teagasc expects pig values to rise by 22% to €2.22/kg (£1.89/kg). Taking account of expected marginally higher feed prices, the knock-on effect is a €0.61/kg (53p/kg) margin over feed, a rise of 135% on 2022.

Dairy

Average income €148,000 (£127,210)

Feed costs rose 28%, fertiliser was up 190% and fuel prices were 80% higher than in the previous 12 months. Total costs rose 40% in 2022 but the dairy sector saw a 44% increase in milk values, which boosted margins by 70% against 2021 levels.

Outlook

The picture for 2023 is less rosy due to an expected weakening in demand for butter and powders. Increases in supply forecast at 4% will add to the downward pressure on milk values, while fuel, feed and fertiliser prices are expected to remain high.

The upshot is a forecast drop in net margins of 40%.

Cattle

Average income for rearers was €8,700 (£7,477) while finishers made €16,900 (£14,527)

Input costs rose by 24% for suckler herds and 28% for finishers. Gross margins for the two farm types had different outcomes, with sucklers seeing a 15% decline on year-earlier levels and finishers achieving a 7% increase.

Grass availability was reduced by the dry summer, but strong demand saw R3 prices up by 16% on 2021 values, while weanlings were up 8% and stores by 11%.

Outlook

Teagasc forecasts a reversal of fortunes next year, with flat margins for finishers but sucklers expected to see an 11% rise. With slightly weaker demand, beef price increases are not expected to keep pace with the rises seen this year.

For R3 steers Teagasc expects an increase of 4% while weanlings and stores are predicted to rise by 5%.

Sheep

Average income €19,900 (£17,100)

Lamb prices rose by 4% during 2022 but an almost 200% rise in fertiliser costs hit margins, despite a 25% reduction in use. Fuel costs, up by 80%, added to the impact and gross margins, at €803/ha (£690/ha) for mid-season lamb, were down by 14% on 2021.

Outlook

Further reductions in gross margins of about 1% to €800/ha (£688/ha) are expected next year as total direct costs for the sector are expected to rise.

Cereals

Average income €64,000 (£55,015)

Cereal yields rose on Irish farms, with a 2% increase in winter wheat and 3% rise in spring barley crops. While seed, fertiliser and fuel costs all rose, taking overall costs up by 57%, the higher grain price was able to offset the impact of this.

Gross margins were up €450/ha (£386/ha) for spring barley and €500/ha (£429/ha) for winter wheat. The overall net margin recorded for an average cereal enterprise was €745/ha (£640/ha), up €235/ha (£202/ha).

Outlook

The predictions for 2023 are relatively poor for Irish cereal growers. Increased production within the EU is expected to boost supply and with more normal weather conditions yields are predicted to decline. Seed prices are also predicted to increase by a third.

Overall, the net margin is expected to be just €65/ha (£56/ha), down by a huge €680/ha (£584/ha).