The average dairy farm income will be over €130,000 this year, a 30pc increase on last year, new figures from Teagasc show. Irish dairy farmers have benefitted from a dramatic increase in milk prices due to the lack of growth in global milk supplies this year, and while average milk production costs are likely to be about 10c/L higher in 2022, through higher feed, fertiliser and fuel expenditure this will be more than offset by the higher milk prices, according to the Teagasc’s new outlook report.

It also states that Irish milk prices in 2022 are likely to be over 40pc higher than in 2021, because of the lack of growth in global milk supplies this year. However, incomes on cattle rearing farms, sheep farms and tillage farms are all forecast to be lower this year. The average cattle rearing farm is expected to make about €9,000 in 2022, this is a drop of 17pc on last year, despite the addition of the Fodder Support Scheme. According to Teagasc, higher production costs should more than offset the benefit of higher cattle prices. The figures show that the average gross margin on a single suckling enterprise in 2022 is forecast to decrease by approximately 10pc, while the average gross margin on cattle finishing farms is expected to increase by 10pc in 2022. The average income for ‘cattle other farms’ in 2022 is forecast to be unchanged at about €17,000. Sheep farm incomes are set to drop by 15pc and come back to €17,700 this year despite 2022 being a good year for lamb prices where they remained well ahead of the five-year average. All of these income calculations are in nominal terms, which means that they do not factor in general inflation and the impact that this has on the purchasing power of incomes earned in agriculture, according to Teagasc economists. “With general inflation now at its highest level for many years, a farm with a stable nominal income in 2022 will experience an appreciable decline in real income.“ The report also shows that there has been no increase in aggregate Irish milk production is forecast this year, for the first time since the abolition of milk quotas in 2015. A further assessment of incomes for 2022 will be made by Teagasc economists in December, along with a forecast for 2023.