Teagasc is projecting that incomes on Irish tillage farms will increase in 2025, relative to the year just ending.
Driving this trend is a forecast increase in crop yields, a slight increase in harvest prices and limited movement in direct costs.
As a result, net margins should be higher than those achieved in 2024, but will remain significantly lower than the high margins received in 2022.
The upward movement in enterprise performance projected for 2025 will mean that cereal-based net margins will be positive on approximately 70% of specialist tillage farms in 2025.
Direct costs are forecast to be similar in 2025 relative to 2024, due to the forecast for little movement in fertiliser costs, seed costs and fuel.
Irish tillage farms
Some direct costs of production are forecast to increase by small amounts in 2025 – crop protection by 4% and all other direct inputs by 1%.
Whilst some direct cost items may increase in 2025, the general trend is for little movement in costs compared to 2024, resulting in total direct costs in 2025 which should be similar to 2024 levels, on a per hectare basis.
Furthermore, output value on average is forecast to be higher than 2024 levels, due to the forecast increase in cereal yields when trend yields are assumed, coupled with a slight increase in cereal prices.
The net effect of input price, output price and volume movements is on average, forecast to have a positive effect on gross margins for 2025.
E.g., gross margins for winter wheat and winter barley are forecast to increase by approximately €320 and €200/ha respectively, while gross margins for spring barley are forecast to increase by approximately €85/ha.
The overall story for the 2025 forecast is for an increase in gross margins as a result of achievement of trend yields, an increase in cereal prices and little change in direct costs.
The forecast net margins for 2025, are presented for the cereal enterprise on specialist tillage farms, as well as the population of such farms disaggregated into one-third groupings based on margins obtained.
The upward movement in margins, relative to 2024, is associated with the yield and price forecasts for 2025 and a decrease in some key direct cost items.
Overall, the net margin for the average cereal enterprise in 2025 is forecast to increase by about €200/ha relative to 2024.