While every year brings fresh challenges for everyone in the farm sector, it is worth taking a few moments to take account of all the progress made, and continues to be made, on several fronts which are set to improve the fortunes of the sector into the future.

1. Derogation: the first thing on our list is one of the most talked about risks in 2025, and one which thankfully saw a positive resolution at the end of the year.

While the announcement was met with more of a sigh of relief than any outright celebration, the three-year extension gives some much-needed certainty on the path ahead, and time to adjust to the inevitable changes that will come.

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Irish farmers have long shown themselves to be able to adjust to new rules, once they know what the rules are and have time to make the adjustment. The extension of the derogation gives that, while lifting the cloud of uncertainty that hung over the industry throughout 2025.

2. Financial strength: while 2026 may not be starting off on the strongest position from a milk-price point of view, the cash buffer built up on many farms over a profitabe 2025 means that the dairy sector is in a healthy position, from a financial perspective, to weather any short-term downturn in prices.

Farm deposits were predicted to be at record levels, at over €1bn, at the end of 2025 and farm borrowing dropped to the lowest level in over 25 years, illustrating the robust financial position of the sector.

3. Farmgate prices: for beef and sheepmeat, there are expectations that margins will remain strong relative to historical levels. Supplies remain tight while demand is holding up well.

Even if there is some easing from the highs seen in 2025, there is nothing on the horizon to suggest a return to the negative margins which had dominated so much of the sector for years. On dairy, the bad news is that milk prices will remain under pressure over the short term.

However, there currently seems to be an insatiable demand for protein globally which the dairy sector is well positioned to take advantage of. There is plenty of reason to think the drop in dairy prices is a short-term correction rather than an outright collapse.

Many dairy farmers will also have a boost in the coming months from selling their spring calves.

4. Subdued inflation: the other side of the coin for farm incomes, input costs, seem set to remain relatively stable over the coming months. The “three Fs” of fuel, fertiliser, and feed saw little major changes in 2025. While fertiliser will see a small bump due to the effects of the Carbon Border Adjustment Mechanism (CBAM), the fundamental driver of rapidly increasing prices driven by soaring energy prices is not in place for the coming year.

Feed prices are also expected to remain subdued for the coming year as the world remains oversupplied with key grains.

5. Green energy: speaking of energy prices, the continued expansion and grant-aided rollout of on-farm solar is giving farmers cost savings on electricity. While there has been some softening of government enthusiasm for on-farm solar projects in recent months, grants are substantial where they can be achieved under TAMS. There are some signs that 2026 will finally see a meaningful expansion of the Anaerobic Digestor sector in the country which will give farmers an alternative income source supplying feedstock to the industry.

6. Global markets: there are always back and forth movements in global markets but Ireland has established its agri-food exports in every part of the world meaning there will always be opportunities for expansion even when political winds change.

In the coming weeks, Bord Bia will publish its annual Performance and Prospects report for 2025 and 2026, and it is not unreasonable to expect another record performance for Irish agri-food exports.

7. EU presidency: Ireland’s turn in the presidency of the council of the European Union comes at a critical time for the country as it will occur during the period when the details of the next Common Agricultural Policy are getting ironed out as part of the EU’s Multiannual Financial Framework.

While the starting position for negotiations could be much better, with competing demands for security for the bloc, Ireland’s position at the head of the table during the crucial months in the second half of this year should pay dividends.

8. Economic strength: Ireland’s economy is expected to grow further in 2026, while the Central Bank’s latest projections for domestic demand show growth continuing this year. A strong national economy is needed to support domestic food demand, but also to ensure that infrastructure improvements across the country can continue.

9. Succession: the farm sector’s problems around getting the next generation into the industry have been well documented. 2025 saw the publication of the report from the Commission on Generational Renewal in Farming, while many dairy co-ops launched programmes to get younger farmers into the industry.

The issues around succession are not going to be solved in 12 months, but the focus on it across the industry and government means that there are financial and regulatory incentives in place which will help young farmers enter and sustain viable farm businesses.

10. Mercosur: it might seem odd to put the seemingly inevitable signing of the Mercosur trade deal in as a reason to be optimistic, but the work done by farming organisations across Europe over 2025 has drawn so much attention to the issue of beef imports, particularly from Brazil, that the implementation of the strengthened terms of the deal will likely be significantly more scrupulous than would otherwise have been the case.

If that work had not been put in over the past 12 months, there could be a Mercosur trade deal with only the most perfunctory checks undertaken. There is now very little chance of that being the case.

Comment

Business pages are not usually a place to look for good news, and we certainly can’t guarantee that the rest of 2026 will be any different than normal on that front. However, it is worth occasionally taking stock of the things that are either going well, or, at least, not as badly as they could be.

Over the past few years we have seen the huge disruption from the pandemic, the Russian invasion of Ukraine, runaway inflation, and President Trump’s trade policies. Before that there was Brexit.

Each of these challenges in turn looked like they could have been existential for large parts of the Irish farming sector. Yet 2025 ended with many farmers in the strongest financial position in a generation.

This success did not happen by accident. The industry has shown its resilience when it comes to facing challenges. While there are plenty of arguments along the way, farmers, processors and policymakers are all working towards the goal of a sustainable and profitable Irish agri-food sector.

2026 will certainly bring its own set of challenges, but if history is any guide, those challenges will be overcome to sustain Ireland’s largest indigenous industry for the future.