Farm Ireland
Independent.ie

Tuesday 6 December 2016

After a year of booming prices it still pays to be cautious as you plan ahead

Pj Phelan

Published 04/01/2011 | 05:00

Very few tillage farmers had forward sold grain last year and they attained better market prices for their produce as a consequence
Very few tillage farmers had forward sold grain last year and they attained better market prices for their produce as a consequence

L ast year will be remembered by most tillage farmers as the year that grain prices exceeded all expectations. Unlike their fellow farmers in Britain, very few had forward sold grain and were able to obtain better market prices for produce.

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However, it was not all good news as potato prices were poor. The only solace for spud men was the fact that prices would have been disastrous if the export market had not materialised.

Some of the smaller potato growers who do not have good storage facilities are losing potatoes due to frost damage.

Damage is most likely near external walls and on uncovered areas of stores.

Growers are finding that frost covers, used in the past for sugar beet, are very effective. Others have covered potatoes with more than two feet of straw and have still suffered damage.

Demand for fodder beet is still very slow. Most fodder beet is harvested, but frost damage has occurred in less well protected clamps.

Unharvested beet has suffered considerable damage and losses will be high. Ensiling of late-harvested fodder beet worked very well on some farms last year. Crops were harvested with a Tyregod, which left rotten beet behind, and were then washed and chopped. The chopped beet was then mixed with 15-20pc citrus pulp or soya hulls and ensiled.

Looking forward

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2011 will be the first year that many farmers will have an option of forward selling cereals. Forward prices are attractive at present but there may be hidden costs.

November prices mean that you will have to cover storage costs and possibly handling, drying and interest charges. All those costs should be fully determined before estimating potential returns. Fertiliser prices will be up at least €100/t on last year. So if it cost you €130/t to grow cereals last year it will cost you at least €145/t this year.

Approach conacre with caution. Remember that many of the farmers that paid fancy prices in 2008 and 2009 were unable to meet their commitments and for some of them, the 2010 returns were not enough for them to recover. It is very important when doing your costing that you include all costs and not simply fuel, seed, fertiliser and sprays.

Repair maintenance and depreciation are very much linked with acreage. The concept that fixed costs/ac can be reduced by increasing area has been proven wrong on so many farms that it should no longer be a consideration.

Letting land

If you are letting land for the coming year you should be as cautious in accepting a price as the person paying it should be in determining it.

The person paying uneconomical prices is unlikely to stay in business very long and you are at risk of not being paid. Better to get a reasonable price every year and have your land well maintained.

Paperwork

Hopefully all your paperwork in relation to 2010 has been completed and you now have a fertiliser plan in place for 2011.

Looking at fertiliser prices, urea seems good value and may well be suitable for your first split on winter cereals.

One other critical exercise, to be completed or updated, is your farm safety assessment or farm safety statement. It will identify risks on the farm and may well be instrumental in preventing a serious accident.

Templates for completion of farm safety assessments are available from Teagasc, IFA, the HSA or from companies specialising in farm insurance.

If you are employing three or more people you should seek the assistance of a professional in preparing a safety statement.

PJ Phelan is an agricultural consultant based in Tipperary pj.phelan@itca.ie

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