Dairy farm families are facing a 50% cut in their incomes next year, according to the latest economic forecasts from Teagasc, the State Agriculture and Food Development Authority.
This would bring average dairy farm incomes to just €30,000 in 2015, down from €60,000 this year.
Dairy incomes are traditionally the highest incomes by far in the agriculture sector.
A sharp reduction in wholesale milk prices due to a global oversupply of milk is the reason for the expected collapse.
Economists at Teagasc now believe that next year will match the previous record worst year for the dairy sector, which was in 2009.
Having analysed all the trends relating to input and other costs for dairy production, Teagasc said the margin that farmers make from producing milk will fall by 82% next year.
This would bring the average profit for dairy farmers down to just 2 cents per litre of milk.
There are about 18,000 dairy farmers in Ireland and the reduction in their incomes is likely to have a significantly negative effect on the rural economy.
The Teagasc research suggests that net incomes in all other farm sectors - including, beef, sheep, pigs, and cereal production - should remain broadly stable next year.
The forecast of collapsing dairy incomes comes just four months before the removal of European milk quotas that have limited milk production in Ireland for the past 30 years.
The Government is urging dairy farmers to expand their dairy herds and wants to see a 50% increase in milk production by 2020.
