CONSUMERS should see shopping bills fall next year thanks to reductions in the price of milk and dairy products.
A new Teagasc report has predicted that milk prices paid to farmers will fall by 10pc in 2014 from the exceptional highs seen this year.
And this could spell good news for consumers who were hit with steep increases of 10c per litre for milk this summer as world prices surged.
"Falling prices for milk at farm level does mean consumers could see some reversal of the milk price increases passed on during 2013, and this could also apply to other dairy products such as cheese and butter," said Teagasc economist Trevor Donnelan at a Dublin conference to discuss the report.
The 'Teagasc Annual Review and Outlook 2014' found that 2013 has been a year of mixed fortunes for farmers, thanks to bad weather and fodder shortages in the first six months, compensated for by strong food prices later in the year.
Farm income across the board is estimated to be up 1pc this year but there were significant variations in different sectors.
Dairy farmers fared best, with incomes rising 15pc, up from €50,000 in 2012 to €58,000 in 2013.
High prices for milk meant profits were up 38pc per litre of milk compared to the previous year while the average dairy farm received an EU subsidy of €21,000.
Beef farmers were hit with high fodder costs earlier in the year, but strong beef prices led to average income on cattle farms rising 3pc to €18,000.
However, there were winners and losers within this sector, as those rearing cattle saw incomes drop by 30pc, while those finishing cattle for slaughter saw income soar by 30pc.
Sheep farmers saw average income fall by 14pc to €16,000, while pig farmers saw prices rise but feed costs increase, pushing income down by 1pc.
For tillage farmers, it was a mixed bag with wheat growers faring better than barley growers, and overall income on tillage farms down 5pc in 2012.
Teagasc predicted that 2014 will see production costs fall on Irish farms, provided there's no repeat of this year's prolonged bad weather.
However, milk prices are likely to fall from the exceptional levels seen this year.
Meanwhile Irish beef and sheep prices should be relatively stable in 2014.
With declining costs, this should lead to higher profits, said Dr Kevin Hanrahan of Teagasc.