Farm Ireland

Tuesday 16 January 2018

Bumper harvest will yield little for farmers

Fertiliser costs are increasing
Fertiliser costs are increasing
Darragh McCullough

Darragh McCullough

A combination of falling grain prices, increasing fertiliser and financing costs has resulted in many grain farmers looking at little or no profit this year, despite record yields.

News filtered through this week of a €12/t hike in CAN fertiliser prices as two of Europe's largest nitrogen manufacturers moved to increase their quotes from €225/t to €237/t.

It comes at the same time as Irish farmers find themselves paying up to five times more than their Continental counterparts in interest rates on money to run their businesses.

"Many Irish farmers are paying rates of 5-9pc on overdrafts compared to rates as low as 1pc for even smaller growers in countries such as Germany," said the IFA's grain chairman Liam Dunne.

However, he is hopeful that the most recent hike in fertiliser prices may be reversed if US fertiliser giant, CF Industries, completes a deal to buy Europe's OCI over the course of the next six months.

"That might kick off a bit of renewed competition with Yara, which would help. But in the meantime, the trade must shore up grain prices to tide growers over, since this will be the third year running that many tillage farmers will end up subsidising crop production from their CAP payments, a situation that is unsustainable," he said.

Meanwhile, fears are mounting that demand will outstrip supply for barley seed dressing to combat Barley Yellow Dwarf Virus (BYDV) as the pest responsible for the disease becomes more resistant to pesticides.

The spread of the so-called knockdown-resistant (KDR) aphid has severely compromised the efficacy of pyrethroid sprays that cereal farmers have relied on over the last number of decades.

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September 2014 barley planted without any seed dressing showed yield reductions of up to 3t/ha due to BYDV, according to Teagasc cereal specialists Michael Gaffney and Eamonn Lynch, who presented their findings at the national tillage forum in Kildare last week.

They identified pyrethroid-resistant aphids at five separate sites this year, throughout Ireland's key grain-growing areas in the east and southeast. This followed the discovery that over 90pc of the aphids tested at a Tipperary site in 2014 were carrying the resistance gene.

The only substitute available to farmers sowing early is a seed dressing that acts as an alternative pesticide.

However, the main product is controlled by only one manufacturer, Bayer.

With the winter barley area up by 100,000ac in the last four years as growers switched from winter wheat to new higher yielding barley varieties, growers are concerned there may not be enough product to meet demand.

However, Bayer's James Byrne said that they had increased their order by at least 10pc to cover any expected increase in demand.

"We think we've enough because we don't expect any big change in the overall acreage of winter barley this year. We'll only get caught if this harvest suddenly wraps itself up or if more winter wheat is planted," he said.

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