Dairy farm incomes to reach over €110,000

Farm incomes in the dairy sector could hit their second-highest level ever seen next year, if Teagasc’s outlook for 2025 plays out.

Teagasc expects dairy incomes to jump 80% this year to average €89,000, in a partial recovery from the sharp slump in dairy incomes – to an average €49,400 witnessed last year.

The authority’s economists anticipate a further improvement in dairy incomes into 2025, if there is a return to more typical weather and grass growth conditions.

A predicted 2025 average milk price of 49.67c/l (excluding VAT) at actual solids would see incomes rebound to €113,000, it said.

This would be second only to the bumper €157,000 farm incomes seen in 2022, before farmers found themselves in a rising input cost, falling milk price squeeze.

This higher milk price is expected to come as farmgate milk volumes increase 4%, allowing farmers to increase output value. The milk output slump witnessed earlier this year has abated somewhat, as Teagasc expects the year to end with volumes down 2%, an improvement on the 4% decline reported for the months of January to September.

Teagasc sees the cost base of milk production remaining high into 2025 at 36c/l, but down 4% on 2024’s costs, due to an anticipated easing of fertiliser and meal costs. The costs exclude a value on ‘owned’ labour.

The analysis is based on more favourable weather conditions, allowing feed volumes to come back on what is anticipated to be an average of 1.3t concentrate fed per cow this year, up 10% on 2023, with a slight easing in tonnage costs also expected.

Overall, Teagasc’s figures show that dairy net margins should end 2024 at 13.3c/l, or €1,580/ha when excluding areas-based payments.

The forecast for 2025 points towards equivalent figures of slightly over 17.1c/l and €2,130/ha before area-based payments are factored in.