An improvement in farm incomes is expected this year following a 30% drop in 2009, according to Teagasc.
However the State farm body has warned that rural poverty is on the rise.
Average farm income last year was €12,000 per farm, the lowest income since 1999.
However, Teagasc anticipates that milk prices and dairy farm margins should begin to recover this year, but it may be 2011 before the sector returns to normal levels of profitability.
The head of the National Farm Survey at Teagasc, Liam Connolly, told a conference in Portlaoise that Irish cattle prices are forecast to rise by 4% in 2010.
However, over two-thirds of cattle farms are likely to continue making a loss from cattle farming this year.
Teagasc economists predict an upward movement in cereal prices, but the net margin for the average cereal producer is likely to remain negative in 2010.
Farm households have observed a significant decline in household incomes relative to non-farm households over the past 20 years.
Dr Cathal O'Donoghue, Head of Teagasc's Rural Economy Research Centre, warned that there is a continuing trend in higher rural poverty.
He pointed out that farmers have been hit hard by unemployment, with 30% of farmers losing their off-farm jobs between 2008 and 2009.
