A new Teagasc outlook report forecasting the average margins and incomes across the agricultural sector warns of continued financial concerns for Irish farmers as high costs exert pressure on ‘the three Fs’: fuel, feed and fertiliser.

This year, along with other sectors of the economy, Irish farmers faced considerable uncertainty about input price inflation, which impacted production decisions, Teagasc said.

This uncertainty was driven mainly by Russia’s illegal invasion of Ukraine, which had on-the-spot consequences for the fuel, feed and fertiliser markets.

Farmers are feeling the biggest financial squeeze from soaring fertiliser costs, which have more than doubled, fuel prices up by 50% and feed prices rising by 33%, according to statistics released by the Central Statistics Office (CSO).

Extremely high prices for 2022 had been expected on the foot of rising European gas prices, but the rapidly increasing input costs across the sector are resulting in considerable challenges for farmers.

Overall, significantly higher production costs across all sectors in 2022 are expected in 2023 – widening the gap between the cost of production for farmers and what they are being paid.

For farm incomes, the outcome in 2022 was mixed, according to Teagasc economists.

While the average farm income is up considerably, the increase is entirely driven by the strong performance of the dairy sector, which is likely to be up by 50%, said Teagasc.

The dairy sector outlook for 2023, however, is less positive.

With the dairy sector excluded, the average income across the other sectors is down considerably.

For more, read this week’s Connacht Tribune.

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