2012 to wipe €250m off profits
The bumper farm profits of 2011 appear set to be a short-lived phenomenon, according to the latest projections from Teagasc.
Experts from its economics unit have predicted an overall drop of €250m or 10pc in total farm incomes this year, on the back of the continuing upward creep in costs and weaker beef, sheep, cereal and milk prices.
"I don't expect 2012 milk prices to average much more than 7pc lower than last year," said Trevor Donnellan.
The researcher said that any price reductions in the beef sector should also be small.
Mr Donnellan has forecast a 5pc reduction in sheep prices and a 15pc reduction in cereal prices. "Cereal farmers are going to see the biggest drop in profitability with fertiliser prices set to increase by 15pc for potassium, and phosphorous and nitrogen to increase by 7pc."
Pig farmers look set to buck the trend, however, with prices set to rise by 5pc.
Feed costs should fall by up to 8pc in 2012, due to 15pc higher yields.
And while the economic unit predicted that fuel costs would remain similar to last year, it believes labour and electricity costs will increase by 1pc and 5pc respectively over the coming 12 months.