Although an increase in margins on suckler farms is forecast by Teagasc next year, average net margins are expected to remain negative in 2019 at €-27/ha.
Teagasc’s Annual Review and Outlook 2019 was published earlier this week and states that gross margins on single-suckling enterprises are forecast to increase by 20% on average next year to €458/ha.
On beef finishing units, gross margins are expected to rise by 19% on average to €509/ha and overall net margins are forecast to be positive at €9/ha.
There is a significant variation in forecasts between the top and bottom performers. On single-suckling enterprises, Teagasc expects the most profitable units to deliver a net margin of €172/ha next year, compared with €-247/ha on the least profitable enterprises.
The same is seen in beef finishing with net margins of €233/ha on the top performing units and €-193/ha on the least profitable enterprises.
The forecast margins are based on a 2% increase in Irish beef prices next year, compared with 2018 levels. This is reflected on the weanling and store cattle trade with young cattle prices expected to be up by 4% next year.
“The projected increase in supplies finished cattle will be significantly lower than the increases observed in 2017 and 2018,” the document reads.
Exchange rates seen throughout this year are assumed by Teagasc for 2019 and so are existing trading arrangements between the EU and UK after Brexit.
On the cost side, feed prices are expected to be unchanged and, with normal grass growing conditions assumed for the 2019 season, total feed costs are forecast to be down by 25% on single-suckling enterprises and 26% on finishing units.
Fertiliser prices are forecast by Teagasc to be up 16% next year, but usage on suckler and beef farms is expected to be down 10%.
Contractor charges are not expected to change next year.
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