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Thursday 8 December 2016

Do sums on costs or face consequences

Pat Minnock

Published 05/10/2010 | 05:00

The last of the harvest appears to have been finally completed. There were mixed fortunes. Spring wheat again was disappointing in yields and returns with millers failing to cover themselves in glory or even in trying to ensure the continued growing of this crop.

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There were fantastic yields of spring beans with up to 3t/ac achieved while spring oilseed rape had mixed results.

Good yields (1.2-1.5 t/ac) were obtained for the earlier harvested crops, while the late harvest saaw yields of less than 0.5 t/ac. The big lesson was that when rape was desiccated and could not be harvested on time, there was substantial seed loss during the harvest. We have experienced before that non-desiccated rape crop holds better and loses less seed, especially if the harvest is delayed.

Fields

After a much improved harvest this year, at least pricewise, and much better returns than the past two harvests, farmers are again positive and eager to get into the fields. This has resulted in almost all the winter barley seed being sold out already -- Anisette is the only variety remaining -- and would indicate at least a doubling of the winter barley acreage from last year when home-saved seed is considered. The situation with winter wheat seed is similar with some varieties already sold out. When you consider that this is October -- quite early for sowing wheat, especially in take-all prone situations -- what level of wheat plantings can we anticipate this autumn?

Now is the time to take stock and do your sums. If you remember the good year of 2007, surely you remember the two years that followed? Output prices dropped dramatically but input costs rose as dramatically.

Already, input costs have started to rise again. While there are no firm prices available for fertilisers, it is a good bet that fertiliser costs will be up substantially next spring. Winter barley and wheat seed is already getting scarce and the cost per acre for seed looks like being up at least 20pc. Imported seed will only add further to these costs.

Spring barley did well this year to yield 2.75t/ac and, even with the better prices achieved, this only left a gross margin of about €90/ac (excluding straw). Winter barley struggled to yield 3.3t/ac (GM €80/ac), while winter wheat at 3.5t/ac left a margin of less than €60/ac. There is no cost included here for conacre.

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Why rush into sowing high-cost crops such as winter barley

and wheat, especially when there are good alternatives and when costs for these crops are going to be even higher due to seed scarcity?

The loss of the sugarbeet crop has been a huge cost to Irish agriculture. This is nowhere more evident than on its value as a break crop. At the time of its elimination, we had a cereal to break crop ratio of 3:1 which, in my opinion, is about right. Currently, even with projected rises in break crops, this ratio is now closer to 5:1. We need break crops to sustain high yields of grains. The loss of this valuable break crop is no doubt also contributing to the low protein levels that are starting to manifest in malting barley.

Compare these: 1.85t/ac of winter oilseed rape, 2.75t/ac of spring beans, 1.5 t/ac of spring oilseed rape. All achievable yields left gross margins above €200/ac this year. Some of you have done the sums -- the acerage of winter oilseed rape has increased by at least 2.5 times this autumn.

Let the rest do the sums or suffer the consequences.

Pat Minnock is an agricultural consultant in Carlow, the president of the ACA and a member of the ITCA. www.minnockagri.ie

Irish Independent



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