Positive Price Prospects for Irish Farming due to Strong Agricultural Markets

Strong international growth and the emergence of biofuels production will lead to improved economic prospects for Irish agriculture over the coming years, according to a report released today, Tuesday, 9 October. The FAPRI-Ireland report provides analysis of the prospects for the agricultural and food sectors over the period 2006 to 2016.

For many agricultural products, price prospects look much better than in the earlier part of the decade, according to economist Dr Kevin Hanrahan of the FAPRI-Ireland Partnership. Overall Irish agricultural sector income is set to grow by 4 percent over the next 10 years.

High prices for cereals, dairy commodities and milk are set to continue for the next 2 to 3 years and stronger demand for these commodities will benefit the Irish agricultural sector over the longer term.

Some livestock sectors are unlikely to do as well as the dairy and cereals sectors. In particular cattle and sheep numbers continue to fall due to decoupling of agricultural support payments. However, because of reduced production, prices in these sectors are set to
increase in the future.

Looking at future prospects for incomes on cereal farms, FAPRI-Ireland economist, James Breen, said that these should improve in the short term due to higher prices. However, he cautioned that expansion in cereal output will be required to maintain cereal farm incomes at their current levels over the longer term.

The report states that 10 percent of all beef farmers would be better off ceasing production now, when the costs incurred to meet eligibility for the single farm payment are considered. This percentage will increase as production costs outpace beef price increases in future years.