Tillage: more positive outlook for cereals
The outlook for margins on cereal farms is more positive for 2024 than the year gone by in 2023 which had high input prices, poor yields and reduced grain prices.
Grain prices are expected to increase, input costs are expected to decline and, as a result, margins should increase in 2024. That’s according to the Teagasc outlook report for 2024.
Teagasc said that current futures markets indicate that 2024 harvest prices will be slightly higher than those that prevailed at harvest 2023, by over 10%.
Yields dropped in 2023, mainly due to weather and a reduction in winter cropping area. Teagasc expects a return to five-year trend yields in Ireland in 2024.
Direct costs of production are expected to decline in 2024. The main drivers of this decline are a reduction in fertiliser, seed and fuel prices.
However, other overhead costs are expected to increase in 2024 by about 2% compared to 2023.
Overall, this means an increase in gross margins on cereal farms. Teagasc has forecast that, in 2024, the spring barley gross margin will increase by approximately €530/ha. Winter barley and winter wheat gross margins are forecast to increase by €415/ha.
Yields dropped in 2023, mainly due to weather and a reduction in winter cropping area.
The average specialist tillage farm is forecast to return approximately €485/ha in net margin. However, approximately 25% of tillage farms are expected to return a negative market-based net margin in 2024.
- Siobhán Walsh
Dairy: milk prices to recover
This time last year, there was really only one way things could go for dairy farmers because 2022 was such a good year for farming. The milk price drop experienced in 2023 wasn’t unexpected but was nonetheless painful and sharper and deeper than forecasted. This, allied with pretty awful weather over most of the country, has meant that 2023 will be a year to forget.
All farmers are optimists and as we head into 2024, the general feeling is that it’ll be a better year than last. If the weather is more normal and milk prices continue to rise, then that wish will have come true.
However, both weather and markets are outside of farmers’ control, so they have no influence over these areas which have the biggest impact on their business.
It’s expected that milk prices in 2024 will be above 40c/l, including VAT, which is historically a wonderful milk price. But, as Teagasc is predicting in its outlook report, the cost of production is not expected to fall in 2024 and this is really worrying. This means that margin, even at a 40c/l milk price, will still be curtailed relative to the 2019 to 2022 period.
It’s expected that milk prices in 2024 will be above 40c/l, including VAT.
While a milk price of 40c/l seems much better than the current price, it’s worth remembering that the average milk price in 2023 was around 35c/l.
Apart from some new measures curtailing the use of nitrogen, it is not expected that 2024 will bring about any major policy decisions. That will come in 2025.
Renewables: 2024 to be
another move on the chessboard
Next year will see the development of subtle policies aimed at reshaping the energy landscape.
In the upcoming year, we can expect to see multiple consultations translated into concrete policies.
Key policies for farmers, including the National Biomethane Strategy and the export tariff for the Small-Scale Renewable Electricity Support Scheme, are set for early 2024.
These policies will outline the roadmap to develop Ireland’s anaerobic digestion industry and the pricing structure for exporting renewable electricity to the grid over a 15-year period.
While this represents significant progress, there is little in the pipeline to suggest the challenges of planning and grid connections will be eased.
Rooftop solar will still be the most widely accessible and important renewable energy technology for farmers in 2024.
- Stephen Robb
Sheep: hopes of lower
input costs in 2024
With farmgate prices expected to remain unchanged in 2024, the majority of sheep farmers will be hoping that reduced input costs can improve their enterprises’ bottom line.
Concentrates, fertiliser and energy costs have been the main drivers of increased expenditure in recent years and the Teagasc forecast of an 8% reduction in direct production costs is greatly anticipated.
Lamb supplies in the first half of the year are expected to be slightly down on 2023 levels.
The 2023 lamb kill is running 75,000 head lower than in 2022 but it is not foreseen that there will be any big additional carryover of lambs. Ramadan (10 March to 9 April) and Easter (31 March) are falling in close succession and likely to boost demand, while Eid al-Adha (16 to 20 June) will deliver a concentrated lift in demand.
EU production is predicted to continue to fall which bodes well for Irish farmers but lower-priced Australian and New Zealand sheepmeat on the global market and free-trade agreements with the nations are an ongoing concern.
- Darren Carty
Beef: positive outlook for 2024 cattle trade
Cautious optimism would be how you would describe the outlook for the 2024 beef trade.
It will probably be remembered by most for being a very tricky grazing season with a lot of cattle coming in lighter than expected with a resultant delay in slaughtering.
This has had a positive effect on beef price over the last number of weeks, with prices increasing, and current indications would be that these increases will continue as we enter into the new year.
It’s been a bumper year for live exports with over 300,000 live cattle exported in 2023.
A year of high live exports also bodes well for beef price in the following years as the supply/demand curve shifts in favour of the farmer.
The current live export prospects for 2024 also look positive, with a lot of interest from the Middle East and north Africa for Irish cattle.
- Adam Woods
Tillage: more positive outlook for cereals
The outlook for margins on cereal farms is more positive for 2024 than the year gone by in 2023 which had high input prices, poor yields and reduced grain prices.
Grain prices are expected to increase, input costs are expected to decline and, as a result, margins should increase in 2024. That’s according to the Teagasc outlook report for 2024.
Teagasc said that current futures markets indicate that 2024 harvest prices will be slightly higher than those that prevailed at harvest 2023, by over 10%.
Yields dropped in 2023, mainly due to weather and a reduction in winter cropping area. Teagasc expects a return to five-year trend yields in Ireland in 2024.
Direct costs of production are expected to decline in 2024. The main drivers of this decline are a reduction in fertiliser, seed and fuel prices.
However, other overhead costs are expected to increase in 2024 by about 2% compared to 2023.
Overall, this means an increase in gross margins on cereal farms. Teagasc has forecast that, in 2024, the spring barley gross margin will increase by approximately €530/ha. Winter barley and winter wheat gross margins are forecast to increase by €415/ha.
Yields dropped in 2023, mainly due to weather and a reduction in winter cropping area.
The average specialist tillage farm is forecast to return approximately €485/ha in net margin. However, approximately 25% of tillage farms are expected to return a negative market-based net margin in 2024.
- Siobhán Walsh
Dairy: milk prices to recover
This time last year, there was really only one way things could go for dairy farmers because 2022 was such a good year for farming. The milk price drop experienced in 2023 wasn’t unexpected but was nonetheless painful and sharper and deeper than forecasted. This, allied with pretty awful weather over most of the country, has meant that 2023 will be a year to forget.
All farmers are optimists and as we head into 2024, the general feeling is that it’ll be a better year than last. If the weather is more normal and milk prices continue to rise, then that wish will have come true.
However, both weather and markets are outside of farmers’ control, so they have no influence over these areas which have the biggest impact on their business.
It’s expected that milk prices in 2024 will be above 40c/l, including VAT, which is historically a wonderful milk price. But, as Teagasc is predicting in its outlook report, the cost of production is not expected to fall in 2024 and this is really worrying. This means that margin, even at a 40c/l milk price, will still be curtailed relative to the 2019 to 2022 period.
It’s expected that milk prices in 2024 will be above 40c/l, including VAT.
While a milk price of 40c/l seems much better than the current price, it’s worth remembering that the average milk price in 2023 was around 35c/l.
Apart from some new measures curtailing the use of nitrogen, it is not expected that 2024 will bring about any major policy decisions. That will come in 2025.
Renewables: 2024 to be
another move on the chessboard
Next year will see the development of subtle policies aimed at reshaping the energy landscape.
In the upcoming year, we can expect to see multiple consultations translated into concrete policies.
Key policies for farmers, including the National Biomethane Strategy and the export tariff for the Small-Scale Renewable Electricity Support Scheme, are set for early 2024.
These policies will outline the roadmap to develop Ireland’s anaerobic digestion industry and the pricing structure for exporting renewable electricity to the grid over a 15-year period.
While this represents significant progress, there is little in the pipeline to suggest the challenges of planning and grid connections will be eased.
Rooftop solar will still be the most widely accessible and important renewable energy technology for farmers in 2024.
- Stephen Robb
Sheep: hopes of lower
input costs in 2024
With farmgate prices expected to remain unchanged in 2024, the majority of sheep farmers will be hoping that reduced input costs can improve their enterprises’ bottom line.
Concentrates, fertiliser and energy costs have been the main drivers of increased expenditure in recent years and the Teagasc forecast of an 8% reduction in direct production costs is greatly anticipated.
Lamb supplies in the first half of the year are expected to be slightly down on 2023 levels.
The 2023 lamb kill is running 75,000 head lower than in 2022 but it is not foreseen that there will be any big additional carryover of lambs. Ramadan (10 March to 9 April) and Easter (31 March) are falling in close succession and likely to boost demand, while Eid al-Adha (16 to 20 June) will deliver a concentrated lift in demand.
EU production is predicted to continue to fall which bodes well for Irish farmers but lower-priced Australian and New Zealand sheepmeat on the global market and free-trade agreements with the nations are an ongoing concern.
- Darren Carty
Beef: positive outlook for 2024 cattle trade
Cautious optimism would be how you would describe the outlook for the 2024 beef trade.
It will probably be remembered by most for being a very tricky grazing season with a lot of cattle coming in lighter than expected with a resultant delay in slaughtering.
This has had a positive effect on beef price over the last number of weeks, with prices increasing, and current indications would be that these increases will continue as we enter into the new year.
It’s been a bumper year for live exports with over 300,000 live cattle exported in 2023.
A year of high live exports also bodes well for beef price in the following years as the supply/demand curve shifts in favour of the farmer.
The current live export prospects for 2024 also look positive, with a lot of interest from the Middle East and north Africa for Irish cattle.
- Adam Woods
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