Farm Ireland

Sunday 17 December 2017

Optimism replaces doom and gloom

PJ Phelan

PJ Phelan

THE DOOM and gloom of the past two years' grain prices has lifted, to be replaced with cautious optimism. Given improved prices and reduced fertiliser costs this year, margins should be €150/ac better than last year, and grain quality is excellent.

Harvesting of winter barley is almost complete and a start has been made on harvesting some February-sown spring barley. Yields range from 2-4.8t/ac, with an average yield of 3.1-3.3t/ac. Highest yields have come from six-row varieties and hybrids. The six rows have had some head losses but no significant losses overall.

Moistures are satisfactory at 15-21pc, with most crops coming in at 17-18pc. Bushel weights are generally in the high 60s and some saffron is at 70.

Winter oats appear to be yielding better thaN expected, at up to 3.8t/ac, but averaging 3t/ac with bushel at 55/56 and moistures of 14/15pc. However, there are many thin crops of spring oats sown last winter that will do well to yield 2.5t/ac.

The better yields are reported from land after break crops, where organic fertilisers were used and from fresh land. The highest yield of winter barley to which I referred to above was on a crop of winter rape.

Undoubtedly the heavy spring frost made a tremendous improvement to land which had been compacted in the past two years. However, there are structural problems in many fields, as evidenced by thin crops with poor grain fill. Such lands will need to be assessed post-harvest and remedial programmes put in place.

The largely unasked and unanswered question is how much will merchant's pay?

In previous years, farmers looked for a price agreement before delivery. This year, with most commentators advising of reduced supply to world and European markets and increasing futures prices, farmers anticipate improving prices and merchants are avoiding price commitments.

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There are rumours of private deals for €130/t for green barley at 20pc moisture, but on-account prices of €115/t were the only firm commitment at the time of writing. Some merchants, however, have indicated that they expect to pay at least €120 and possibly €125/t. There will be a shortage of wheat and it is likely to make €20/t more than barley. Feed oats is likely to be +/-€10/t of the barley price.

There is a strong demand for barley straw, with round 4x4 bales making €16+ collected from the field. The demand is largely led by the perception that straw will be scarce due to reduced acreage and that some spring barleys are light, while others have short straw.

So far, very little grain has been sold off the combine as finance is scarce and price uncertainty remains. However, the volatility of grain prices is difficult for everyone.

This year's improved price may still be short of many tillage farmers breakeven price of €130-140/t, and it certainly does not give any scope for paying more than €100/ac for conacre.

On the other side, users of grain and drystock farmers in particular, need to be able to plan with better knowledge of concentrate costs. The option of drystock farmers supplying land, tillage farmers supplying the work, input costs shared and the harvest divided is one that should be considered.

Farmers who have both the finance and storage facilities are probably best advised to continue with previous trading patterns -- sell one-third of grain at harvest, one-third pre-Christmas and one-third next spring. This should result in obtaining the average price delivered by the market and avoiding the troughs and peaks. The experience of contract storage from merchants has not been good to date but it is still an option that a small number of farmers have opted for.

Despite this year's optimism, everyone in the tillage industry must be concerned that it takes an upset in world grain production to give us a breakeven margin. A more permanent reduction in cereal areas would certainly maintain prices.

On a recent trip to Germany I met a machinery dealer who said combine sales were down due to the increased area under crops for anaerobic digestion. Increased use of tillage crops for anaerobic digestion in Europe, and some in this country, may well ensure future viability.

Meanwhile, I had a report from John Mahon, Carlow, on mangle fly in fodder beet. Crops should be examined and assessed. It is unlikely that it would pay to spray an insecticide on its own but it should be considered if going in with a fungicide.

Irish Independent