Higher milk prices boost farm incomes by 30% to €32,000

Milk prices boosted farmers' incomes this year by a third to almost €32,000, but earnings could dip in 2018, according to agriculture agency Teagasc.

Kevin Hanrahan, head of the organisation's rural economy and development programme, told its National Outlook conference on Tuesday that farm incomes improved in 2017.

“Overall average farm income in 2017 is estimated to have increased by about 30 per cent to about €31,900, compared to €23,500 in 2016,” Hanrahan said.

“This increase is driven by the improvement in dairy farm and, to a lesser extent, tillage farm incomes.”

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Slow growth in world dairy production drove an estimated 30 per cent increase in farm milk prices in 2017.

Teagasc economist Emma Dillon said the average dairy farm income in 2017 would top €90,000 – its highest ever – an increase of about €40,000 on last year.

Milk prices could fall 10 per cent next year as world production begins to outpace growth in demand.

Nevertheless, Teagasc said milk production would remain profitable for Irish farmers.

Agency economist Trevor Donnellan predicted that overall farm incomes would fall 6 per cent in 2018 to €29,800, but would still be among the highest in recent years.

The agency also predicted that Irish beef prices would rise modestly next year as European Union supplies fell and demand remained stable.

Tillage economist Fiona Thorne explained that the sector's prospects depended on the impact that the 2018 global harvest would have on Irish cereal prices.

While Brexit will take a key market, the UK, out of the EU, the conference heard that it was too early to say whether the negotiations between London and Brussels would hit farm incomes next year.