Farm Ireland

Monday 22 January 2018

Prices show there's big money from oilseed rape

Caitriona Murphy

Caitriona Murphy

Extremely strong forward prices for oilseed rape could be enough to tempt tillage farmers away from cereals in favour of the energy crop, new Teagasc figures show.

Analysis of the profit potential of crops shows that oilseed rape could deliver more than double the margin of winter wheat next year.

Winter oilseed rape could deliver a margin of €244/ac over all costs except land to farmers, compared to a margin of €106/ac for winter wheat, according to Teagasc crop expert Jim O'Mahony.

The figures are based on a 2012 price of €400/t at 9pc moisture for a 1.8t/ac crop of oilseed rape and €150/t at 20pc moisture for a 4t/ac winter wheat.

Mr O'Mahony said tillage farmers should seriously consider oilseed rape as a potential crop for 2012.

"At this stage, it looks like it could be more profitable than winter wheat next year," he pointed out. "But it is also a very useful break crop."

Sowings of oilseed rape have increased steadily in recent years. Between 2009 and 2010, the area sown to oilseed rape increased by 25pc from 6,300ha to around 8,000ha. The area sown for this year's harvest is believed to be between 10,000ha and 12,000ha. The majority of this year's crop, about 8,000ha, is in winter oilseed rape, while the rest is a spring crop.

Prices for oilseed rape have surged on the back of international demand for oilseeds for biodiesel production, rising from around €270/t in January 2010 up to in excess of €400-450/t this year.

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The bulk of oilseed rape is sold forward by farmers to one of three main local oilseed players, Quinns of Baltinglass, Drummonds and Glanbia. It is understood some farmers have already locked in at prices of over €400/t for their 2012 crop already.

IFA cereals chairman Noel Delany warned that the crop could only be used once in every five years due to disease carryover issues but Europe's deficit in oilseed rape meant that any increase in Irish production was extremely unlikely to have an effect on prices here.

Nonetheless, he pointed out that Ukrainian production of oilseed was up this year, which could have an effect on European prices, on which Irish prices are based.

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