Despite a downturn in some commodity prices towards the end of 2025, the last 12 months will go down as a good year on many farms around the country.

Costs, weather and output prices don’t usually align with one outlier almost every year leaving margins tight.

The last 12 months were different in that weather played ball for the most part; costs were able to be kept under control; and output prices took a big lift relative to 2024 and stayed high for much of 2025 in the main beef, sheep and dairy sectors.

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Big challenges lie ahead, the first being a possible ratification of the Mercosur trade agreement in the first few days of January.

This could have profound consequences for Irish beef exports into Europe.

Displacement

We have already seen the effect of displacement of Irish product in the UK market in the last few weeks and further displacement of Irish high-end cuts like striploins could have severe consequences on price.

Milk price is also a big concern for the country’s 16,000 dairy farmers.

At the recent Teagasc outlook conference, Teagasc economists predicted a further 20% drop in milk prices in 2026.

Production is expected to stay stable, but increased costs – including fertiliser – will see margins in dairy production drop considerably in 2026.

Much of the pressure on milk prices is down to supply with milk production up all over the world.

Cheap grain has meant that countries like the US have seen a big increase in production.

Milk output in the US is up 4% this autumn with New Zealand also tracking ahead of last year’s figures.

Europe, and within that Ireland, is also producing more milk compared to 12 months ago, and all this global supply increase has tipped the supply demand balance, with further pain expected in the first half of 2026.

Teagasc predicts that average dairy farm income will drop by 41% in 2026 to €80,000.

The last four years have been a rollercoaster for Irish dairy farmers coming from an average farm income of €50,000 in 2023 to a peak of almost €140,000 in 2025 and back to that predicted €80,000 in 2026.

Managing those peaks and troughs will be more important in the future to navigate global supply and price movements.

Given where beef price is, calf sales and cull cow sales will also form a more important part of farm output in 2026.

Beef, sheep and tillage

Suckler farmers and beef farmers have also enjoyed an unprecedented 2025. Suckler farmers in particular have had a great 12 months.

The peak in numbers at autumn weanling sales in September and October coincided with the peak in prices, with weanling producers taking home €1,000/weanling extra in many cases.

This sector needed a much-warranted lift and it got it in spades in 2025.

An increased beef price and bluetongue restrictions across Europe fed into that increase.

Beef finishers also saw a much-improved 2025 in terms of beef price, with replacement store prices tempering any big gains during the second half of the year.

Prime cattle prices were up 40% with weanling prices up 70%. Average farm income is expected to come in at €30,000 for 2025, up from €13,788 in 2024.

Sheep farmers also saw a 33% lift in farm income in 2025 to €36,500 on the back of increased lamb prices.

Following two disastrous years for the tillage sector Teagsc reported a slight upturn in cereal farmers fortunes in 2025 with a 14% increase in income; however the sector remains hugely challenged from an income perspective.

Decrease

Finally, pig farmers saw an 8% decrease in their margin over feed in 2025, on the back of a 6% decrease in pig prices coupled with little change in feed prices.

Teagasc is forecasting a further 10% drop in pig incomes in 2026.

CAP supports remain a large part of income on many Irish farms and all eyes will be on the next CAP fund and what changes to the fund will mean for Irish farmers.

A reduced fund will mean reduced income for Irish farmers, so this is one of the biggest battles that will be fought in 2026.