There’s no denying that the change in farm fortunes in the last year has been huge and almost universally to the benefit of primary food producers.
Dairy farmers have seen a strong milk price and, importantly, one without the significant volatility that had been seen in recent years. Beef and sheep prices have hit record highs. The only sector that’s been left behind is tillage, which is facing its own challenges from global supply and difficulties in demand for malting barley.
What’s bad news for the tillage sector, however, is good news for the dairy and beef sector as feed costs have remained low.
In fact, input costs have remained surprisingly stable throughout 2025, with no repeat of the extreme energy and fertiliser price spikes that were seen in 2022.
Down to Business with Lorcan and Phelim:
Tuesday at 10.45am
Lorcan Roche Kelly and Phelim O’Neill will look at trends that have led to the high output prices in the dairy and livestock sectors, and discuss what the outlook is for all sectors of Irish agriculture.
With around 90% of Irish agricultural production exported every year, the international trade picture is critical for the future profitability of Irish farming.
While the last year has seen high prices, it has also seen huge levels of disruption and uncertainty due to the trade policies of US president Donald Trump. The EU and the US reached a framework agreement on a trade deal at the end of July, which took the worst-case scenario off the table, but the addition of extra duties on a range of products is inevitably bad news for exporters to the US.
But the global trade picture is about a lot more than the United States. For industries like beef, the US hardly has any direct effect as Ireland’s beef exports to the US are a tiny fraction of what is produced here. The trade deals which have nothing to do with Trump, such as the Mercosur agreement and post-Brexit UK trade arrangements have the potential to be a much bigger factor for Irish farmgate prices in future.
There is plenty to be hopeful for on the global demand side, with the continued expansion of the global middle class – particularly in Asia – meaning that there will be more and more customers for high-quality food for years to come. Irish exporters need to keep pace with where these new markets are developing and be sure to take advantage of the opportunities available.
On the cost side, the outlook seems to be relatively benign. There are some increases in fertiliser prices on the cards, but they have been well flagged and are unlikely to be at a scale which will cause much financial difficulty.
However, the high prices in the beef sector particularly have come with their own challenges. Calf-to-beef systems and finishers are having to spend multiples of what they had in previous years for stock. Those that do buy at current levels need the price at finishing time to be high enough to justify that investment. We have heard of more than one farmer who has decided that the risk is too much and opted not to continue their traditional route this year.
This points to a wider issue which is emerging – the problem with beef supply from farms. There is a risk that a shortage of animals for processors could lead to the closure of some factories in Ireland, which would turn a short-term squeeze on output into a longer-term fall in capacity.
With Ireland’s dairy sector already constrained by the nitrates derogation rules and other environmental constraints, it is becoming increasingly difficult to see where an expansion of total food production from this island could come from.
This, added to the ongoing problem with succession and attracting young people into the industry means that agriculture, despite the high prices currently being received, has plenty to think about over the coming years.
There’s no denying that the change in farm fortunes in the last year has been huge and almost universally to the benefit of primary food producers.
Dairy farmers have seen a strong milk price and, importantly, one without the significant volatility that had been seen in recent years. Beef and sheep prices have hit record highs. The only sector that’s been left behind is tillage, which is facing its own challenges from global supply and difficulties in demand for malting barley.
What’s bad news for the tillage sector, however, is good news for the dairy and beef sector as feed costs have remained low.
In fact, input costs have remained surprisingly stable throughout 2025, with no repeat of the extreme energy and fertiliser price spikes that were seen in 2022.
Down to Business with Lorcan and Phelim:
Tuesday at 10.45am
Lorcan Roche Kelly and Phelim O’Neill will look at trends that have led to the high output prices in the dairy and livestock sectors, and discuss what the outlook is for all sectors of Irish agriculture.
With around 90% of Irish agricultural production exported every year, the international trade picture is critical for the future profitability of Irish farming.
While the last year has seen high prices, it has also seen huge levels of disruption and uncertainty due to the trade policies of US president Donald Trump. The EU and the US reached a framework agreement on a trade deal at the end of July, which took the worst-case scenario off the table, but the addition of extra duties on a range of products is inevitably bad news for exporters to the US.
But the global trade picture is about a lot more than the United States. For industries like beef, the US hardly has any direct effect as Ireland’s beef exports to the US are a tiny fraction of what is produced here. The trade deals which have nothing to do with Trump, such as the Mercosur agreement and post-Brexit UK trade arrangements have the potential to be a much bigger factor for Irish farmgate prices in future.
There is plenty to be hopeful for on the global demand side, with the continued expansion of the global middle class – particularly in Asia – meaning that there will be more and more customers for high-quality food for years to come. Irish exporters need to keep pace with where these new markets are developing and be sure to take advantage of the opportunities available.
On the cost side, the outlook seems to be relatively benign. There are some increases in fertiliser prices on the cards, but they have been well flagged and are unlikely to be at a scale which will cause much financial difficulty.
However, the high prices in the beef sector particularly have come with their own challenges. Calf-to-beef systems and finishers are having to spend multiples of what they had in previous years for stock. Those that do buy at current levels need the price at finishing time to be high enough to justify that investment. We have heard of more than one farmer who has decided that the risk is too much and opted not to continue their traditional route this year.
This points to a wider issue which is emerging – the problem with beef supply from farms. There is a risk that a shortage of animals for processors could lead to the closure of some factories in Ireland, which would turn a short-term squeeze on output into a longer-term fall in capacity.
With Ireland’s dairy sector already constrained by the nitrates derogation rules and other environmental constraints, it is becoming increasingly difficult to see where an expansion of total food production from this island could come from.
This, added to the ongoing problem with succession and attracting young people into the industry means that agriculture, despite the high prices currently being received, has plenty to think about over the coming years.
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