Farm Ireland

Thursday 18 January 2018

Bumper US crop sees Irish grain prices slide

Caitriona Murphy

Caitriona Murphy

With harvesting of the first crops of winter barley less than three weeks away, grain prices remain on a downward spiral.

The latest report from the United States, issued on Friday evening, confirmed that its maize crop is to be the largest in almost 80 years.

USDA officials said growers had planted 39.4million hectares of maize, which is higher than growers intended to plant in March and is, in fact, the biggest crop since 1936.

The soya bean and wheat crops in the United States are also higher than 2012.

The US report has put a major dampener on grain prices internationally and this is expected to trickle down to Irish prices in the coming days.

Prior to the USDA report, Glanbia had been offering growers a harvest price of €196/t for dried wheat, equivalent to a €156/t green price. It offered €10/t less for barley.

Dairygold had been offering €157/t for green wheat and €141/t for green barley since June 19.

Liffey Mills/Drummonds had offered €165/t for green wheat and €150/t for green barley.

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Good planting and growing conditions across the other major grain-producing regions – Western Europe, Ukraine, Russia and South America – are all adding to the price pressure on international markets. The price slide is exacerbated by investment funds leaving the commodity market in recent weeks.

Here at home, industry experts maintain grain buyers are happy to sit and wait while prices fall.

"There are people in the trade and the marketplace who expect prices to fall another €10/t. They're not in any rush to buy because they think they will get it cheaper," remarked one grain buyer. IFA grain chairman Noel Delany maintained tillage farmers would lose money on crops in the coming weeks.

"At Dairygold's price of €141/t for barley, growers would need 2.6t/ac just to break even, but the average yield for spring barley is only 2.3t/ac," he pointed out.

He added that while grain prices had been lower in 2008, at €95-100/t, input costs had risen dramatically since then.

"Fertiliser prices are up 40pc, sprays are up 10pc and diesel has doubled in price since 2008," Mr Delany maintained.

Nonetheless, Teagasc chief agronomist John Spink told farmers at the Oak Park open day last week that the long term outlook for tillage growers was positive.

"In the shorter term, as dairy production here in Ireland increases from 2015 onwards, so will demand for concentrate feeding, grains and protein," Mr Spink said.

"Looking ahead, demand for cereals is expected to increase quite dramatically in the next 50 years and supply is not going to keep up with demand," he added.

Irish Independent