Irish tillage farmers face the real prospect of tighter margins in 2026, as overhanging stocks from the 2025 harvest cast doubt on any potential price increases next harvest.

That’s according to Teagasc Economist, Fiona Thorne who addressed the recent Teagasc Outlook 2026 Conference.

Reflecting on 2025 and providing estimates on income for the year outgoing, she explained that incomes are forecast to increase on specialist cereal, oilseed and protein crop producing farms, stemming from increased winter plantings and higher yields at harvest in 2025.

However, farmers faced a 10% drop in harvest prices for cereals and a slight rise in direct costs, leading to mixed gross margin returns. This, she estimated, means that average net margin on tillage farms will increase by €35/ha in 2025, and around 70% of specialist tillage farms are forecast to record a positive net margin this year. Including the Straw Incorporation Measure and coupled tillage payments, the average net margin is forecast to reach €270/ha in 2025, though she noted that considerable variability exists between low and high margin farms.

Fiona Thorne

Looking ahead to 2026, Fiona Thorne noted that production across the EU is expected to trend downwards, owing largely to reductions in autumn plantings. Despite this, large opening stocks on the global stage are expected to overshadow any reduction in 2026 output, potentially limiting the possibility of price increases come harvest time. She noted these stocks are already “having a significant impact on the market,” preventing futures prices from rising.

As a result, little movement is expected in 2026 harvest prices, with wheat prices forecast to remain broadly in line with 2025.

The Teagasc economist also outlined several factors that could push prices higher next harvest, including lower-than-trend EU yields due to weather pressures; reduced EU winter planting area; uneven autumn rainfall across Europe; and the La Niña weather pattern.

But she also highlighted risks that could depress prices further. Chief among them is the global stocks-to-use ratio, which continues to exert downward pressure. A potential peace settlement in Ukraine and increased global production volumes could also weigh on markets.

Forecasting tillage farm incomes for the year ahead, she noted that input costs are expected to edge upward in 2026. Fertiliser prices are forecast to rise by 10%, crop protection products by 1%, while seed costs are expected to fall by 1%. Overall, direct costs per hectare for tillage crops are predicted to rise by around 3% on tillage farms in 2026.

As a result, gross margins for key crops are set to decline, with Fiona Thorne adding: “A decrease in gross margin of €105/ha is forecast for winter wheat and €85/ha for winter barley and virtually no change for spring barley. We are forecasting a decrease in net margin of about €35/ha in 2026, bringing us back to the levels that we saw in 2024.”

The average projected net margin for cereals, oilseed rape and protein crops stands at €235/ha, with around 70% of specialist tillage farms expected to remain in positive territory.

For further insights and to read Fiona Thorne’s full review of 2025 and outlook for 2026, visit here.