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Dairy margins set to improve in 2017
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Dairy margins set to improve in 2017

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Rising cow numbers, yields and prices are all expected to add to dairy farmers' income next year, according to Teagasc.
Rising cow numbers, yields and prices are all expected to add to dairy farmers' income next year, according to Teagasc.

Based on forecast production levels, output price and input cost movements, dairy margins are likely to improve in 2017 compared with this year, according to the Teagasc Annual Review and Outlook. The report forecasts an average net margin on Irish dairy farms of 10.5c/l or €1,198/ha in 2017.

In 2016 milk production increased by an estimated 5% due to an increase in cow numbers. This trend is forecast to continue in 2017 based on an increase in cow numbers and yield improvement. Any additional milk produced next year is expected to be at a low marginal cost, contributing to the increase in margin achieved per ha.

Listen to "Discussing Teagasc's outlook for 2017" on Spreaker.

Apart from fuel, input costs on dairy farms in 2017 are expected to stay the same as this year.

The forecast, presented by Trevor Donnellan, shows a 15% to 20% increase in the average annual milk price next year. However, the build up of SMP stocks is an area of concern, with market demand needing to be robust enough to allow stocks to be released without adversely affecting price.

Read more

Teagasc sees 5% farm income growth next year

Dairy markets: WMP prices remain flat as Chinese import demand tails off

Full coverage: Teagasc outlook 2017

Read the full report: Teagasc annual review and outlook

Teagasc outlook: did 2016 forecasts come true?

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