Further improvement in farm incomes in 2025, but more mixed outlook ahead in 2026

Favourable weather and generally positive market price developments provided the basis for a good year in 2025 across much of Irish agriculture. Good sunshine levels and higher than normal temperatures provided an excellent start to the grazing season. Favourable grass growth conditions persisted throughout much of the rest of the year. However, there were drought conditions in some southeastern regions at points in the summer, while heavy rain impacted on grazing generally towards the end of the season.

On tillage farms, favourable weather during late 2024 and into 2025 prompted an increase in the area of winter cereal crops planted in 2024. As a result, cereal production in 2025 was in line with the five-year average, but considerably up on the 2024 level.

Turning to inputs, fertiliser prices moved upwards over the course of 2025, but usage levels increased on the relatively low level reported in 2024. While animal feed prices remained relatively steady in 2025, feed volumes were up, mainly due to the favourable output prices. Expenditure on fuel decreased slightly during the year, while electricity prices remained stable.

For dairy farms, an excellent start to the grazing season and favourable peak season grass growth meant milk production increased about 4% to 5% relative to the 2024 level. Higher milk prices were a feature of much of 2025, but prices fell considerably towards year end. For 2025 as a whole, milk prices were about 3% higher than in 2024. The sharp increase in beef prices in 2025 meant that dairy farmers benefitted from very high prices for cull cows and surplus calves. The typical dairy net margin should be about 21 cent per litre in 2025, an increase of about 4 cent per litre on the 2024 average. Taking account of the increase in milk production, the average dairy farm income in 2025 should be approximately €137,000, an increase of 26% relative to the 2024 level. Dairy farms have the highest labour requirement of any farm type, with the average farm requiring 1.44 units of family labour.

For cattle rearing farms, incomes should show a substantial increase in 2025. Averaging over the year, prices for weanlings, store and finished cattle were all up dramatically on 2024 price levels. There were also some cost increases, with higher fertiliser prices as well as higher fertiliser usage occurring in 2025. Higher cattle prices are expected to drive a large improvement in margins this year. The average income on a cattle rearing farm in 2025 is estimated to be approximately €30,000, an increase of 118% on the modest 2024 level.

For the cattle other farm category (mainly finishers), finished cattle prices have increased considerably, with the annual average price in 2025 up 40% on the 2024 level. However, prices paid for young cattle to stock these farms increased to a much greater extent than in 2024. With production costs up marginally, the average income for cattle other farms in 2025 is forecast to increase to approximately €23,000, an increase of 26% on the income figure reported in 2024.

In 2025, Irish sheep and lamb prices increased on the record price level observed in 2024, with prices up about 6%. Higher prices reflect the reduction in sheep supply across the EU. In Ireland there has been a dramatic reduction in the volume of sheep slaughtered in 2025. It is not clear what is driving this reduction given the relative stability in ewe numbers nationally. In this estimate for margins in 2025 and 2026, it has been assumed that physical output per hectare is stable at 2024 levels. With production costs showing little change on the previous year, margins and income for sheep farms are estimated to have increased. The average income on a sheep farm in 2025 is estimated to be approximately €36,500, an increase of 33% on the average income level in 2024. Some sheep farms also have a secondary cattle enterprise. Therefore, the strong growth in margins from beef production also contributed to the growth in average sheep farmer incomes this year.

Favourable weather meant that tillage farms yielded higher production volumes in 2025. However, on the flip side, a large harvest internationally led to lower international and Irish cereal prices. The average income on a tillage farm in 2025 is estimated to be approximately €47,200, an increase of 14% relative to 2024. However, the average tillage farm income in 2024 was somewhat below the five-year average level. Hence, the average tillage income in 2025 is broadly in line with the five-year average. Some of the increase in income on specialist tillage farms in 2025 can be attributed to the increased margins on the subsidiary beef farming enterprise on these farms, along with higher coupled tillage direct payments.

To further investigate the income changes on more specialised tillage farms, a detailed analysis was carried out this year for the first time focusing on specialist cereal, oilseed and protein (COP) producing farms. By definition, COP farms have considerably less output from subsidiary livestock production. Incomes increased on these specialist COP farms in 2025 by a similar magnitude to tillage farms. However, the increase in income on COP farms was due to gains from more intensive winter cereal production, coupled with higher coupled payments from tillage related direct payments (such as the Straw Incorporation Measure, Protein Aid Scheme and Tillage Support Scheme).

Pig production was less profitable in 2025, although pig production increased by 5% in volume terms. Pig prices, measured on a monthly basis, declined as the year progressed. As a result, pig prices in 2025 were on average 6% lower than in 2024. Due to a 3% drop in feed prices in 2025, production costs were marginally lower. This has resulted in a reduction in margins on pig farms, with an estimated margin over feed of 79 cent per kg for 2025.

The average farm income in 2025, is estimated to be up 33% to almost €49,400, with the increase largely driven by the increase in beef related income on both dairy and drystock farms.

Due to storm Éowyn, there were huge financial, logistical and supply chain challenges within the forest sector in 2025. The impact required re-planning of forest operations and supply chains to facilitate the harvest, recovery, and marketing of windblown timber. Felling licence processes were prioritised to support harvesting of impacted timber.

Outlook for 2026

Looking ahead to 2026, economic growth at the global level is expected to be slightly lower than in 2025., Although there is considerable uncertainty associated with the outlook, due to geopolitical and trade related tensions and concern that some stock market prices may be inflated.

Limited input price movements are forecast in 2026, meaning that costs will remain at the high level which has emerged in recent years. Fuel prices are forecast to be lower, while fertiliser prices are likely to increase due to the introduction of the EU Carbon Border Adjustment Mechanism (CBAM). Feed prices are likely to fall marginally in 2026. There is likely to be some further increase in the prices of other input items. General inflation is expected to remain at close to the target level. So overall, production costs in 2026 should be close to the 2025 level.

Entering 2026, dairy commodity prices will be considerably lower than 12 months ago, particularly so for butter. This means that the outlook for Irish milk prices is negative. Taking the year as a whole, Irish milk prices in 2026 could be down by more than 20% on their average level for 2025. Given the seasonality in Irish milk production, any recovery in dairy commodity prices in the second half of next year will limit, rather than reverse, the expected decline in milk prices in 2026.  However, dairy farms should continue to benefit from high cull cow and surplus calf prices in 2026. At 11.5 cent per litre, the average dairy net margin in 2026 is forecast to be down 45% on the 2025 level. The forecast average dairy farm income in 2026 of €80,000 would represent a 42% decrease on the estimated average dairy income level for 2025.

Finished cattle prices are forecast to increase marginally in 2026. The forecast is for a 5% increase in finished cattle prices with a forecast of a 3% increase in store cattle prices in 2026 relative to 2025. The price of weanling cattle increased at an exceptional rate in 2025. It is forecast that some of this increase will be reversed in 2026, with a 5% decrease forecast for weanling prices. Production costs are expected to increase slightly in 2026. Average incomes are forecast to rise on cattle other (finishing) farms in 2026, with an increase of 18% to €26,000. Average incomes on cattle rearing farms in 2026 are forecast to decrease by 5% to €28,500. In general, farm incomes on cattle farms in 2026 are forecast to be well above historical averages.

For sheep farms, lamb prices in 2026 are forecast to increase relative to 2025 price levels. With a forecast reduction in production costs and continued coupled direct payments under the Sheep Improvement Scheme and the National Sheep Welfare Scheme, the average sheep farm income in 2026 is forecast to rise to €38,500, an increase of 5% on the estimated 2025 level.

On tillage farms, cereal prices are forecast to be broadly similar to those paid at harvest 2025. Under the assumption that trend yields are achieved, yields in 2026 would be down marginally on the 2025 level. Factoring in slight inflation in production costs in 2026, the average tillage income is forecast to decrease marginally by 1% to €46,900. Income on the average specialist COP farm is forecast to decrease by 6% in 2026 to approximately €43,500. The slightly higher percentage decrease in income for COP farms is due to the smaller scale of their subsidiary drystock enterprise.

The volume of pig production is forecast to increase by a further 2% in 2026. While Irish pig prices are forecast to fall by 10%, little change in production costs in forecast. The margin over feed cost is forecast to decrease to 61 cent per kg.

The average farm income in 2026, is forecast to fall by 19% to just over €40,000, but the decrease will be largely driven by a decline in dairy income. By contrast, incomes in drystock and tillage should remain relatively stable. All farm income estimates for 2025 and forecasts for 2026 are inclusive of support payments.

In 2026 in the forest sector, there will be a continuing focus on recovery from storm impacts. The increased Government budget allocation of €93 million for forestry measures in 2026 includes supports for new forest creation, and potential support measures for forest owners through a reconstitution scheme for those affected by storms and ash dieback.

The Teagasc Outlook 2026, Economic Prospects for Agriculture, is available to view and download here

Farm System average income 2024, with estimate for 2025 and forecast for 2026

	2024	2025e	2026f		25vs24	26v’25
	€	€			%	%
DAIRY	108,672	137,000	80,000		26%	-42%
CATTLE REARING	13,788	30,000	28,500		118%	-5%
CATTLE OTHER	18,182	23,000	26,000		26%	13%
SHEEP	27,348	36,500	38,500		33%	5%
TILLAGE	41,471	47,226	46,918		14%	-1%
SPECIALIST CEREALS, OILSEEDS & PROTEIN	40,925	46,015	43,437		12%	-6%