After an extremely positive year on tillage farms in 2022 Teagasc has reported that tillage family farm incomes could drop to €33,000 in 2023. That’s an estimated decline of 48% on 2022 and was calculated by Teagasc and presented at the Teagasc Outlook and Review Conference in December.
Cereal prices are expected to drop by 21%. Teagasc economist Fiona Thorne placed green wheat prices at anywhere from €210-350/t for harvest 2023. Yields are also expected to return to more normal trends.
These factors are resulting in a decline in income, but there is also an increase in costs with fertiliser prices up 10% on 2022 purchases. Seed costs are also on the rise and are estimated to be up approximately 30%. Crop protection costs are expected to be up by 3% after a 20-30% increase in 2022. Fuel costs are estimated to be down approximately 18% on 2023.
Worryingly, the majority of tillage farms are set to lose out in the new CAP, with many losing more than 10% of their income. To put this into perspective BPS and greening payments accounted for 59% of farm income on tillage farms in 2019, which is a more representative year than 2022.
In 2022, the average gross margin for cereal crops increased by 34%.
In 2023, gross margins on tillage farms are to decrease by €900/ha for spring barley, €1,215/ha for winter wheat and €700/ha for winter barley.
Farmers should work on their crop costs and returns during the winter to see where spending can be saved and what crops and schemes might deliver more income or help to stabilise some of their income.
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