How long can high prices last?

For cattle and sheep farmers, 2025 has opened well. The frankly fantastic prices gained during the closing months of last year have strengthened further in the opening weeks of the year.

Cattle prices, with heifers within touching distance of €6.50/kg, and bullocks only a few cents behind, are where they need to be for farmers to make a decent living.

But the rate of price increase in recent months is a little dizzying. Can farmers trust that this is the new market, or is it a welcome but temporary bubble? Lambs are making €200-220/head, prices farmers have long needed, but have only been able to dream of.

In-lamb ewes are comparatively good value, with only the best ewes making north of €320. This might be in part due to the lack of young sheep farmers, and the lack of young farmers in general, ready to dive into a buoyant market and build up a flock.

It may also be a reflection of a little nervousness that these prices are so good that they might be too good. “Where’s the catch?” is a question never too far from a farmer’s mind.

The buoyancy of 2022, particularly in the dairy and tillage sectors, dissipated quickly the following year.

Farmers who made long-term commitments, particularly land-leases, at the height of the bubble, will be making payments based on that elevated market for years to come.

The drystock sector doesn’t have the same need for extra land; very few sheep or suckler farmers are struggling with derogation limits. But money is limited on drystock farms, and is carefully minded.

And there is a little unease at buying now at the top of the cattle and sheep live sales when there will be a wait of some months for a return on that investment.

Finished cattle

It’s mostly only finished cattle coming to market at this time of year. And they, like factory lambs, are scarce.

Some farmers might bring under-finished cattle to the mart to catch the high prices, allowing a specialist finisher to complete the job. But in a few weeks, store cattle, yearlings in particular, will be emerging as we head toward the 2025 grazing season. What kind of prices will farmers feel able to reach to?

Marts too must be a little uneasy. The sharp increase in prices means any credit lines they extend have increased too. The terms may be short-term, and it’s a time of year when stock numbers in marts aren’t at their highest.

For cattle finishers, it’s not hard to have a shed of animals that have cost quarter of a million given where store prices have been. Whenever there’s been a wobble in the cattle market, these are the farmers who are most exposed. And this week, Donald Trump is throwing curveballs at the global trading and taxation system. Will there be a wobble? It’s too early to say but let’s hope his actions don’t match his rhetoric.