Farm incomes rose by more than 30pc (€2bn) in 2010 as the Irish agriculture sector bounced back after two very difficult years.
Exports from the agri-food industry totalled €7.8bn last year, an increase of 11pc on 2009, according to export figures from the Department of Agriculture's Annual Review and Outlook 2010/2011, published this week.
And the growth looks set to continue with predictions of a 3pc rise in the value of agri-food and drink exports in 2011.
Total farm income increased by 31.5pc to almost €2.1bn last year, the report found. The cereals sector had a particularly good year, with output valued at more than €200m, an increase of more than 88pc on the previous year, while the dairy sector increased its exports by 17pc. Minister for Agriculture Simon Coveney said the recovery in farm incomes was good news for food producers and processors but also for the Irish economy as a whole.
"The success of the sector comes at a time of continuing financial difficulties for Ireland," he said.
"I am determined to make the agri-food sector a flagship for positive growth and central to the Government's plans for economic recovery."
Minister Coveney added that initial figures for this year were very promising and he expected growth to continue.
The report warned that the key issue for this year would be the continuing increase in costs, notably for feed, fertiliser and fuel. The outlook for the main sectors was that output prices would increase, but the improvement would not be consistent across sectors.
It claimed prospects for Irish and EU dairy exports were positive for this year. Milk prices have increased by up to 30pc and output rose by 7pc since last year. Prices were expected to stay at their current levels or perhaps increase slightly. However, it warned of increased volatility and higher input costs this year.
The immediate outlook for the beef industry was generally positive, with market returns driven by lower finished cattle supplies in Ireland and the EU, a strong live export trade and a competitive global market. The report said the low carryover of hoggets from last year meant the sheep trade for this year had got off to a strong start and the market environment for sheepmeat for the rest of the year was positive.
After a rise of 88pc in cereal prices last year, early indications were that sowings of winter cereals had increased 29pc for this year due to renewed optimism in the sector and strong forward prices.
However, the pig sector suffered with increased cereal prices and a lack of credit. No recovery in European pig prices is forecast before the middle of 2011.