Eye-catching forward prices of €410-450/t for oilseed rape are expected to drive the acreage of the crop being sown.
The area of land sown to winter oilseed rape has almost doubled to 12,000ha already this year and a further increase in spring oilseed rape is likely, according to Teagasc.
Glanbia offered a forward price of €450/t for dried oilseed rape at harvest on Thursday. On the same day, Dairygold offered €410/t for green oilseed rape at harvest, with a green price of €372/t on offer for the 2013 harvest.
Oilseed rape prices have been on an upward trajectory for the past two years, driven by demand for biodiesel in Europe, particularly Germany. The crop also has the advantage of boosting wheat yields in the following rotation by up to 1t/ac.
Teagasc tillage expert Jim O'Mahony said forward prices for oilseed rape were very good and, based on Teagasc figures, the crop could be very profitable.
Comparing the profitability figures for winter wheat and oilseed rape, Mr O'Mahony said a 4t/ac winter wheat crop at €150/t green would result in a gross margin of €110/ac, while a 1.6t/ac crop of oilseed rape priced at €370/t green would yield a gross margin of €240/ac.
"Even at a low yield of 1.2t/ac, oilseed rape is at least as profitable as winter wheat, but at a good yield, it could be at least twice as profitable," he said.
However, he warned that oilseed rape was a specialised crop and needed extra care when sowing so as not to bury the seed too deep.
The crop can only be sown once in every four or five years, which could limit some growers.
Meanwhile, the international cereal market remains volatile, with all eyes watching the drought situation in Britain and Europe.
On Thursday, Glanbia offered a forward price of €195/t for dried wheat this November, €187/t for November 2013 and a dried barley price of €188/t for October.
It offered growers a green wheat price of €164/t for September and €168/t for December. The company also quoted a green barley price of €159/t for September and €164/t for December.
On the same day, Dairygold offered growers a forward price of €197/t for dried wheat and dried barley at €190/t in November.
With up to 40pc of this year's crops locked into fixed forward prices, IFA grain chairman Noel Delany said the system was working well for farmers.
He said cereal growers could look ahead with a greater degree of certainty and arrange credit on a much sounder footing.
Mr Delany urged all farmers to follow the markets closely and base their decisions on the evolving situation.