Teagasc recently published their mid-year economic outlook. Overall, the average net margin on dairy farms are expected to be down 60% in 2018.
The report predicts a 75% increase in average feed use per dairy cow in 2018. The increase in feed use per head will depend on the particular circumstances on the farm, with usage in certain regions comparatively higher than others. Feed prices have also slightly increased in the first half of 2018 due to a reduction in global stocks, and a reduced domestic cereal crop. Fertilizer prices have increased but usage is down year to date. This may recover as normal weather returns. Oil and natural gas prices have been on the rise over the last 12 months and this has contributed to an increase in fertiliser prices in 2018. While fuel and electricity are less significant inputs, at farm level it is estimated that fuel costs will be 6-7% higher in 2018 compared to 2017. Short term prospects for dairy commodity prices are for stability according to Teagasc.
The extreme income volatility affecting dairy farmers, once again highlights the need for a suite of measures including a new agri taxation option to allow farmers to stabilise their income from one year to the next.
The Teagasc Report can be viewed here
Agri Food Policy Executive
21 Sep 2023