Sheep farms are expected to record an average income of just under €34,000 in 2025, representing an 22% improvement on the previous year, new figures show.

A new outlook report from Teagasc economists reviews the current position in agricultural output and input markets and assesses prospects for Irish farm incomes this year.

Average farm income across all systems in 2025 is forecast to reach €48,500, representing a 39% increase on the 2024 figure.

This growth is being driven by income gains in dairy and drystock enterprises.

According to the report, for 2025, margins earned from sheep production are forecast to remain above 2024 levels, and well ahead of the margins achieved in previous years.

Average gross margin per hectare in 2025 is forecast to be circa 11% higher than in 2024, at just over €1,060 per hectare.

Slaughter data from the Department of Agriculture, Food and the Marine for 2025 so far show a large decline in factory throughput, the Teagasc report notes.

Sheep slaughter in the first 28 weeks of 2025 was 214,170 head, (16%) below the corresponding period in 2024.

Average sheep slaughter weights are close to 3% higher this year and this will partially offset the impact on sheep production resulting from the drop in sheep slaughter.

For the year as a whole, sheep meat production is forecast be close to 13% lower.

According to the report, a lower supply of lambs on Irish, EU and UK markets and higher world prices will support Irish lamb prices through the remainder of 2025.

Average Irish lamb prices for the year to date are 7% higher than in 2024.

For 2025, annual average lamb prices are forecast to remain around 8% higher than in 2024.

Costs of production on Irish sheep farms are forecast to increase in 2025, mainly due toincreases in fertiliser and other direct costs.

Teagasc's estimate is that direct costs will increase by around 3% on average.

Total costs of production on sheep farms for 2025 are estimated to increase by just under 2%.