Sector enters 2026 in strong financial health as milk and cattle prices lift earnings, though softer commodity markets are expected, reports head of Agri Sector at Bank of Ireland Eoin Lowry.
Ireland’s agricultural sector ended 2025 in notably strong financial shape after a year of favourable weather, higher livestock values and rising milk output, according to new analysis from Bank of Ireland’s Sectors Team.
The Bank reports that the value of total agricultural output grew 9 per cent in 2025, supported in particular by dairy and cattle. Strong grass growth and improved crop yields helped underpin performance.
“Farmers are coming into 2026 in a financially strong position”
“Weather continued to play a key role in the performance of the agricultural sector in 2025,” said Eoin Lowry, head of Agriculture Sector at Bank of Ireland.
Milk production rose 4 per cent compared with 2024 and the annual average base milk price increased 6 per cent to 48 cents per litre. Finished cattle prices climbed 40 per cent to €7.14 per kilogram while average farm family incomes rose 33 per cent to €49,000. Farmers across dairy, beef, sheep and tillage all recorded income gains.
The picture for cereals was more muted. Grain prices for Harvest 2025 declined about 10 per cent, with green feed barley falling to €185 to €190 per tonne. Pig prices slipped 6 per cent to 207 cents per kilogram.
Despite the reversals in parts of the commodities complex, Lowry said the sector exited 2025 in solid condition. “Despite market volatility and price declines for milk in the second half of the year, the sector ended 2025 in robust financial shape,” he said.
Financial resilience strengthens
Bank of Ireland noted a series of financial indicators that point to farmer confidence. Overdraft utilisation fell to 11 per cent at year end, the lowest in more than three years and 9 per cent lower than December 2024.
Farm deposits reached record levels, rising 11 per cent compared with the previous year and 40 per cent compared with five years earlier. Central Bank data suggested deposits increased by more than €0.5bn during 2025.
Total farm debt reached €2.8bn by the end of September, 5 per cent higher than the same point in 2024 but still described by the bank as manageable. New lending increased 11 per cent in the third quarter as farmers invested in buildings, machinery and land purchases.
Outlook for 2026
The bank expects a more challenging profitability environment this year. Global agricultural production is forecast to remain ample and commodity prices are generally set to soften. The average milk price is predicted to fall to 35 cents per litre, a decline of 26 per cent compared with 2025. Net margins on dairy farms are projected to fall 45 per cent.
Beef supply in Ireland, the UK and the EU is expected to remain tight, which should support a 5 per cent rise in cattle prices. Grain prices are forecast to remain broadly unchanged relative to last year, with margins the most weather dependent of any system. Pig prices are expected to decline 10 per cent and profitability in the sector is expected to be marginal.
The wider operating environment will also shape farm decisions. The EU has granted Ireland a three year extension of its nitrates derogation from 2026 to 2028. The extension allows farmers to operate at higher organic nitrogen limits but the approval comes with stricter environmental conditions. Policymakers are also preparing for early discussions on the post 2027 Common Agricultural Policy, with debates expected on budgets, environmental measures and the future balance of supports.
Disease pressures remain a persistent concern, particularly avian influenza in poultry, bluetongue in livestock and African swine fever in wild boar. The Bank cautions that heightened biosecurity is essential across all systems.
2026: A year of consolidation
Bank of Ireland characterises 2026 as a year of consolidation across farming. Costs remain elevated relative to pre 2020 levels and commodity markets are steady to softer, which encourages farmers to focus on efficiency. The Bank noted that farmers with scale, strong cost control and diversified income streams are likely to remain resilient.
“Farmers are coming into 2026 in a financially strong position,” the report states, though tighter cash flows may emerge as the year progresses. Bank of Ireland said it stands ready to provide additional working capital through overdrafts, stocking loans, retrofinance facilities and sustainable finance options such as Enviroflex and the Green Business Loan.
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