Further Boost in Farm Incomes in Prospect in 2025

A new report from Teagasc economists reviews the current position in agricultural output and input markets and assesses prospects for Irish farm incomes this year.

As of mid-2025, the global economic growth outlook has weakened relative to 2024, with a number of ongoing geopolitical considerations presenting downside risk, with trade tensions and exchange rate movements creating uncertainty. Nevertheless, the outlook for farm incomes this year on most farms is now quite positive.

Agricultural input markets have been relatively stable in 2025, with only modest price changes likely for the year as a whole. Feed prices have declined slightly, with average prices in 2025 likely to be down about 4% compared with 2024. Crude oil prices have eased slightly, and fuel prices are expected to be down by approximately 3%, while electricity prices should continue to remain stable.

In contrast, fertiliser prices in the first half of year, when purchasing is more concentrated, were up around 5% relative to the same period last year. Fertiliser usage is likely to be higher in 2025, driven by the combination of cheaper prices compared to 2022 and 2023 and the continuing improvement in profitability across grassland systems this year.  Feed use in grassland systems in 2025 is forecast to be little changed on the 2024 level.

These divergent trends mean that overall production costs are broadly in line with 2024 levels, with some variation across production systems.

Weather conditions during the first half of 2025 have been excellent for grass growth and have also proven favourable for winter and spring planting on tillage farms. These conditions are contributing to improved grass and tillage yields this year.

Dairy commodity prices entered 2025 at a high level and have remained strong through the first half of the year. Milk prices are on track to average about 7% higher than in 2024. Combining high milk prices with favourable weather, should result in a 5% increase in Irish milk production, which will result in higher margins for dairy producers. The average income on dairy farms in 2025 is now forecast to reach about €140,000, representing a 30% increase compared to 2024.

Prices for finished cattle have risen sharply this year, with an increase of over 35% now in prospect relative to 2024. In addition, weanling prices have risen by approximately 45%. While input costs have remained broadly stable, output price improvements will lead to further improvements in incomes across cattle systems. Support payments through the ACRES and Organic Farming Schemes will continue to bolster incomes. Average income for Cattle Rearing farms is forecast to be €25,000 in 2025, up 85%, while Cattle Other (primarily finishing) farms are expected to see incomes rise by 44% to €26,000.

Lamb prices are likely to be 8% higher in 2025 relative to last year. With production costs slightly higher and support continuing under the Sheep Welfare Scheme, ACRES and Organic Farming Scheme, Sheep farms are expected to record an average income of just under €34,000 in 2025, representing an 22% improvement on the previous year. Some sheep farms also have a secondary cattle enterprise and a portion of the increase in income on Sheep farms will result from the improved economic performance of the cattle enterprise.

In the tillage sector, early indications from harvest 2025 suggest that cereal prices are likely to be lower than in 2024. The good planting conditions earlier this year should contribute to higher production volume, and, with relatively little inflation in production costs, average income on tillage farms is now forecast to increase by approx. 12% to €43,000. Much of the increase in income on tillage farms will come from the subsidiary livestock enterprise, which have benefited from higher prices in 2025. The forecasted income on Tillage farms for 2025 is expected to be below the previous 5-year average.

In the pig sector, production volumes are projected to rise by a further 1.5% this year. However, it is expected that pig prices will decline by approximately 12 cent per kg, while production costs are likely to be down by just 2 cent per kg. The margin over feed cost is forecast to decline by 7% in 2025, when compared to 2024, but the sector will continue to return modest profitability.

Average farm income across all systems in 2025 is now forecast to reach €48,500, representing a 39% increase on the 2024 figure. This growth is being driven by income gains in dairy and drystock enterprises. All income figures include direct support payments.

A report on the latest Teagasc Outlook 2025 farm income estimates is available to view and download at https://teagasc.ie/publications/situation-and-outlook-for-irish-agriculture-july-2025/

Farm System average income 2023 and 2024 and forecast for 2025