Impact of Easing Irish Grocery Inflation on Farmers

Introduction

Irish grocery inflation has edged back to 6.06%, and while that may make for a tidy headline, it doesn’t automatically translate into good news for the people producing the food. When prices start to soften at the checkout, it usually means someone further up the chain has taken the hit, and it’s rarely the retailer.

Yes, shoppers are beginning to get a small breather (if even), and yes, grocery sales still grew 5.5% over the past 12 weeks. But that rise comes from people spending more, not buying more. Farmers know that story all too well: higher turnover doesn’t mean healthier margins.

Meanwhile, nothing about the day-to-day costs of running a farm has fallen in any meaningful way. Diesel hasn’t magically dropped because milk is on special offer, and fertiliser certainly isn’t following supermarket trends.

Consumers Are Chasing Value — and Retailers Are Reacting Fast

Irish households have snapped back into “value mode.” You can see it clearly in the numbers. Nearly 22% of all grocery sales this autumn came from promotional lines, a big jump from roughly 16% a year ago. Families are watching every euro, and retailers know it.

Own-label is driving the shift. Those ranges grew 6.3% in recent weeks, compared with 5.2% for branded goods. It’s a sign of the pressure in Irish homes, but it also shows how retailers are positioning themselves: hold footfall, push promotions, lean on cheaper alternatives, and try to keep basket sizes stable.

But cheaper shelves don’t mean cheaper farming. The gap between what consumers pay and what it costs to produce food gets stretched further, and farmers are the only part of the chain that can’t pass costs down the line.

Where Does This Leave Farmers?

In short, in a familiar, uncomfortable position.

Most farmers won’t see any benefit from inflation dipping to 6.06%. The price relief is happening at the checkout, not at the factory gate.

• Beef and lamb prices remain stuck.
• Dairy prices have steadied but are nowhere near their 2022 highs.
• Transport, labour, insurance and compliance costs haven’t budged.
  

So when supermarkets get competitive, negotiations tighten. When negotiations tighten, processors lean harder. And when processors lean harder, it’s farm income that feels the squeeze first.

Farmers are caught between two realities:

1. Many consumers want cheaper food, because household budgets are still tight.
2. The cost of producing that food remains stubbornly high.

Inflation easing doesn’t fix that tension, it amplifies it.

Why This Moment Matters More Than It Looks

The headline figure suggests improvement. But the ground truth is more complicated.

• Households are spending more but getting less for it.
• Retailers are depending on heavy promotions to keep people shopping.
• Processors are arguing harder over every cent.
• Farmers remain the least protected, least flexible link in the chain.
  

Lower grocery inflation does not reduce the price of diesel. It doesn’t reduce the cost of a tonne of fertiliser. It doesn’t ease insurance premiums. None of the expensive parts of farming are linked to supermarket pricing.

So while the public sees prices cooling, farmers see something different: the pressure quietly shifting back onto them.

What Farmers Should Be Watching Next

The next few months will be shaped by three questions:

1. Are retailers preparing another round of supplier price cuts?
With 22% of grocery sales now tied to promotions, retailers are clearly in a scrap for market share. That usually means tougher conversations with processors, and tougher outcomes for farmers.

2. Will milk, beef and lamb prices improve at all in 2026?
If shoppers keep drifting toward own-label and cheaper lines, processors may try to claw back savings. Farmers will need to watch signals closely from factories and co-ops.

3. What happens if inflation picks up again?
Core inflation remains sticky, and energy costs could jump with little warning. If household bills climb again, consumers will cut deeper, and the price pressure will swing straight back to primary producers.

Conclusion

The easing of grocery inflation to 6.06% makes a neat headline, but it doesn’t tell the full story. It’s good news for families trying to stretch the weekly shop. But on Irish farms, the maths hasn’t changed.

Input costs are still high. Margins are still tight. The supply chain still uses farmers as the shock absorber every time the economy wobbles.

If anything, this moment reinforces how urgent it is to push for fairer contracts, greater transparency, and a realistic, long-term approach to valuing food in this country. Because as long as supermarket inflation falls faster than farm input costs, the pressure won’t ease where it matters most, in the yard, not the aisle.

*By Anne Hayden MSc., Founder, The Informed Farmer Consultancy.