IRELAND RECORDED THE sharpest rate of increase in agricultural produce prices in the EU in the first quarter of this year, the bloc’s statistical agency Eurostat has said.

Irish agricultural prices were up an eye-watering 19.3% compared with the same period of 2024. The average increase across the EU was just 2.6%.

With prices in Irish supermarkets for beef, milk and butter all rising fast – 2 litres of milk, for example, was up 27c in a year in May – it’s another example of the pressure on Irish consumers.

Eurostat data released earlier this week showed Ireland is the second most expensive country in the EU, after Denmark, taking into account a wide array of household costs including housing, transport, energy and clothing, as well as food.

Ireland also topped the table as the most expensive country in which to drink or smoke.

Agricultural price rises: that's Ireland with the big blue bar there on the far left. Eurostat

Why are prices rising?

So why are farm-produced foods – staples of our grocery baskets and the cornerstone of the food industry – increasing in price so rapidly?

Agricultural economists say there are a few factors at play.

The rise in milk prices across the EU – 12.6% on average – will skew Ireland’s figure upwards, given the dairy sector’s centrality to the total value of the agriculture sector in Ireland.

Julian Worley, a postdoctoral researcher at the University of Galway, pointed out that Ireland also doesn’t produce many items in the categories where prices fell – olive oil for example. Across Europe, potato prices also fell, while prices for eggs and cereals rose.

Worley added that prices are probably being driven up by chaos in world markets, including the uncertainty caused by US trade war threats and tariffs. Most Irish dairy is exported.

Last year was also a hard year for production weather-wise, and the resulting increase in costs is reflected in prices.

Context for Irish price rises

Tadhg Buckley, chief economist at the Irish Farmers’ Association (IFA), said the recent increase in Irish food prices needs to be considered in a wider context: over a longer-term horizon such as the past 20 years, food price growth has significantly lagged general inflation. We have become accustomed to relatively cheap food.

Buckley added that while it’s true that Irish agricultural prices have increased faster than in the rest of the EU, in absolute terms, farm-gate milk prices remain slightly below the EU average. Farm-gate prices are what farmers receive.

Supply and demand are also at play. There was a reduction of over 200,000 in the number of cows in Ireland in the year to December 2024, with the decrease more pronounced in beef herds. At the same time, a wider shortage of supply across the UK – the market for around half of Ireland’s beef – and Europe has driven up prices.

Buckley added that price inflation may have slowed since the first-quarter period Eurostat’s figures covered, with farm gate prices for both beef and dairy down slightly in April and May.

How are consumers responding?

Damian O’Reilly, a lecturer in retail management at TU Dublin, said data from market research firm Kantar shows Irish consumers are changing their shopping habits in response to higher prices, in particular by becoming more responsive to deals and offers.

“Let’s say steaks are on offer, [consumers] buy today and maybe put them in the freezer,” O’Reilly said.

“People are shopping more discriminately than they were before. They are more aware of the money they’re spending. They’re not buying as much on impulse as they were.”

He added that this is one of the reasons supermarkets are price matching to their competitors and proclaiming these price matches to customers with in-store labels and marketing.

Are farmers benefitting from higher prices?

“I think farmers are seeing a benefit,” Worley said. “But it is coming on the back of higher production costs for several years that were squeezing their margins, as well as a few bad production years when costs were higher.”

“So, it’s a bit of catching back up or catching a breath, rather than a true benefit.”

Buckley, of the IFA, agreed that while the price increases will help dairy and beef farmers, for the latter in particular, it’s an increase from a low base.

Next week, agricultural research agency Teagasc will publish its latest data on farmers’ incomes, for 2024. Buckley expects the data to show an improvement, but will still show that the average farmer is not making that much.

The most recent Teagasc data, for 2023, showed the average dairy farm income was €49,000, while for sheep it was less than €12,000 and for suckler beef just €7,400.

Source : Dairynews7x7 June 23rd 2025 The Journal by Valerie Flynn