Farm incomes are forecast to rise by 13 per cent next year, mainly because the price of feed and fertiliser is expected to fall, Teagasc’s annual review and outlook has found.

Speaking at a conference to discuss the report, Teagasc economist Trevor Donnellan said preliminary figures suggested the average family farm income fell by 1 per cent this year to €25,679, after a very mixed period that included the fodder crisis but also a very good summer.

He said the forecast of a 13 per cent rise in farm incomes was based on the assumption that the weather would be relatively normal next year. An improved global cereal harvest this year has already led to a fall in cereal prices and this was gradually being transmitted to the prices farmers paid for feed. He said a return to normal weather conditions in 2014 should see a 20 per cent drop in feed use on dairy and beef farms, with usage levels returning to normal for the first time since 2011.

Fertiliser spike
Fertiliser use spiked this year as farmers tried to speed up grass growth during the fodder crisis and Mr Donnellan said fertiliser use should return to more normal levels in 2014.

Fertiliser prices should also be lower and a slight reduction in farm diesel prices is also being forecast because oil prices are expected to fall.

Teagasc’s review notes that dairy farmers enjoyed a “spectacular” 17 per cent increase in milk prices this year due to a drought in New Zealand and a strong world demand.

This gave dairy farmers the highest income of all farmers, with an average income of €58,000 this year – a 15 per cent increase on 2012 figures.

Falling incomes
In contrast, farmers rearing beef calves saw incomes falling by 30 per cent to average just €8,500, while farmers who fattened cattle fared better, with a 3 per cent increase in incomes, giving them an average income of €18,500.

Sheep farmers had a difficult year and average incomes were estimated to have fallen by 14 per cent to about €16,000.

Tillage farmers saw average income falling by about five per cent this year, but incomes are expected to increase by one per cent next year.

Earlier at the conference, Ibec economic analyst Gerard Brady cautioned against putting too much emphasis on recent reports of a 20 per cent growth in employment in the agri-food and forestry sector.

He said there had definitely been jobs growth in this sector but added the Central Statistics Office was updating its sample "and the effect of that is actually artificially increasing agricultural employment because agriculture was probably under-represented in previous censuses".

He said another reason for the increase in agri-employment could be explained by the fact that construction workers who also farmed in the past might have classified themselves as construction workers then, but had since lost that work and were now describing themselves as farmers.

Mr Brady also said the outlook was very positive for people relying on consumers, because Ireland’s population was projected to double in the next 30 years.