Farm incomes forecast to rise in 2025
Published today, December 3 as part of the Outlook 2025 Conference held in Teagasc Ashtown, the Teagasc Outlook 2025, Economic Prospects for Agriculture Report, looks ahead to future prospects by forecasting farm incomes in 2025.
Importantly, increases in farm income are forecast across the main farming systems next year.
In 2025, economic growth at the global level is expected to be on a par with 2024, although there are several geopolitical uncertainties which could have an adverse impact.
The reduction in key input prices experienced in 2024 should persist into 2025, meaning that input costs for 2025 as a whole should be in line, or slight lower than in 2024. Forecasting key input prices for 2025 is challenging, as unanticipated geopolitical considerations could affect trade in commodity markets and the price outlook.
With these caveats in mind, energy and feed prices in 2025 are currently forecast to be in line with the 2024 level, while fertiliser prices are expected to be slightly lower than in 2024. There is scope for some cost savings in feed use in grassland systems if weather conditions in 2025 are closer to normal. There is likely to be some further increase in prices of other input items. General inflation is expected to remain at close to the target level. So overall, production costs in 2025 should be close to the 2024 level.
Overall Farm Income Forecast
The average farm income in 2025, is forecast to increase by 22% to €35,700, but the increase will be largely driven by improved incomes in the dairy and tillage sectors. Farm incomes estimates for 2024 and forecasts for 2025 are inclusive of support payments.
Table 1: Farm System average income 2023, with estimate for 2024 and forecast for 2025
| 2023 | 2024e | 2025f | 24 versus 23 | 25 versus 24 | |
|---|---|---|---|---|---|
| € | € | € | % | % | |
| Dairy | 49,432 | 89,000 | 113,000 | 80% | 27% |
| Cattle Rearing | 7,425 | 9,500 | 10,800 | 28% | 14% |
| Cattle Other | 14,735 | 17,000 | 18,500 | 15% | 9% |
| Sheep | 12,625 | 15,000 | 17,250 | 19% | 15% |
| Tillage | 21,398 | 30,000 | 42,000 | 40% | 40% |
Dairy
Dairy commodity prices will enter 2025 at an elevated level and the short term outlook remains quite positive. Taking the year as a whole, there is scope for a further improvement in Irish milk prices in 2025, given that the price for butter, in particular, is at an extremely high level. Milk prices should hold at a high level, at least in the short term, with some reduction occurring as the year progresses. Averaging over the year, milk prices in 2025 could be up 5% on the 2024 level.
Assuming weather conditions are more favourable in 2025 than they have been in 2024, there is scope for a yield based increase in milk production of 4% and some savings from lower feed volumes. Margins in 2025 would therefore improve relative to 2024. The forecast average dairy farm income in 2025 of €113,000 would represent a 27% increase on the estimated average income level for 2024.
Cattle
Cattle prices are forecast to increase marginally in 2025. The forecast is for a 4% increase in finished cattle prices and a 2% increase in weanling prices in 2025 relative to 2024, while production costs are also expected to ease slightly. Average incomes are forecast to rise on cattle farms in 2025, with an increase of 14% in prospect for cattle rearing farms to €10,800, and an increase of 9% for cattle other farms to €18,500.
Sheep
For Sheep farms, lamb prices in 2025 are forecast to remain close to the 2024 level. With a forecast of marginally lower production costs, and with continued support under the new Sheep Welfare Scheme, the average income on sheep farms in 2025 is forecast to rise to €17,250, an increase of 15% on the 2024 level.
Tillage
On Tillage farms, cereal prices are forecast to be marginally higher at harvest 2025. Under the assumption that trend yields are achieved, yields in 2025 would be up on the 2024 level. Factoring in stable production costs in 2025, the average tillage income is forecast to increase by 40% to €42,000.
Pig
The volume of pig production is forecast to increase by a further 1% in 2025. While Irish pig prices are forecast to decrease by 8%, little change in production costs is forecast. The margin over feed cost is forecast to decrease to 72 cent per kg.
Forestry
Government funding for forestry measures in 2025 has been set at €91 million, which would be sufficient to support the establishment of 8,000 ha of new forest area. New planting is forecast to increase in 2025, with over 7,300 hectares currently approved for planting. The net realisable volume of private sector forestry in Ireland is forecast to increase by 2.5% to 2.47 million m3 in 2025. Demand for timber from the construction industry is expected to increase in 2025 due to a forecast of increased construction activity.
The Teagasc Outlook 2025, Economic Prospects for Agriculture, is available to view and download here.