Farm Ireland
Independent.ie

Sunday 18 February 2018

Bumper crops abroad eat into profits at home

Caitriona Murphy

Caitriona Murphy

Irish tillage farmers are pinning their hopes on a serious weather event elsewhere in the world to help push up prices for domestic growers.

Glanbia and Dairygold offered farmers forward prices of €205/t and €210/t respectively for dried wheat in the past week, with €197/t and €195/t on offer for dried barley.

When converted into green harvest prices of €160-165/t for wheat and €155-157/t for barley, the prices would mean farmers would only break even this harvest, according to IFA tillage chairman Noel Delany.

"A spring barley crop yielding 2.4t/ac priced at €160/t would only cover the costs of production and nothing else," he said.

However, with a bumper maize crop expected from the United States and good growing conditions across Russia, the Ukraine and Baltic States, the prospect of a grain price increase here is not likely at the moment.

"But we were in the same position this time last year and the drought in America turned everything upside down," Mr Delany added.

Despite a delayed start to the maize sowing season in the United States, the 2013 US maize crop is expected to be 31pc higher than the drought-stricken crop of 2012.

The latest US government forecast is for a harvest of 14.1 billion bushels of corn, well ahead of the 2009 record of 13.1 billion bushels.

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If this happens, the extra maize will push the price of wheat down internationally.

Adding to the downward pressure on prices is better growing conditions for crops in the Ukraine and Australia, both major exporters on the world grain market.

The Ukraine's 2013 wheat harvest is likely to rise to 19.3m tonnes from 15.8m tonnes last year, while rain on the east coast grain belt of Australia has eased growing concern about its crop.

The Russian wheat crop is forecast to increase from 71.7m tonnes in 2012 to 84-89m tonnes this year.

Wheat planting in Argentina has begun, with higher plantings of 10-15pc expected this year.

DAMAGE

Nonetheless, weather events like droughts or heavy rain in any of the major exporting countries could damage their yield expectations overnight. Heavy rain in the US mid-west stalled corn planting for several days last week, although the rain was to the benefit of crops already in the ground.

Meanwhile, it appears Irish grain growers are hoping for an improvement in price as the harvest comes closer, with Noel Delany estimating that only 10pc of farmers have locked in to forward grain prices yet.

This time last year, some 30pc of farmers had forward-sold grain, only for prices to increase dramatically from June onwards.

Irish Independent