Why there's space for cautious optimism on 2017 harvest and prices
Harvest has commenced, crops are promising and we have a small lift in prices.
The winter barley harvest commenced last weekend and while it is too early to give an indicative yield there is considerable optimism.
Grain costing €130/t to produce and a price of €140/t leaves break-even on owned land and a serious deficit on conacre. Increased prices being paid for conacre by dairy farmers and the uncertainty created by Brexit has left many tillage farmers questioning their future.
Their perception is that production costs here are higher than in the rest of Europe. A report on the Competitiveness of Irish Agriculture published by Teagasc last April showed that our cost to output ratio was similar to that of France, Germany and the UK and lower than that of Denmark and Italy. Irish cereal producers were found to have a competitive advantage compared to the other European countries.
The big question is how long can we and other European countries continue to produce at or below the cost of production and what will happen if we reduce or get out of crop production?
Currently there is no problem in sourcing feedstuffs from outside of Europe but not of feedstuffs produced to European standards.
Approval of products for crop production are done in accordance with the 'Precautionary Principle' - taking preventative action in the event of uncertainty.
The 2013 ban on the use of neonicotinoids has cost European oilseed rape farming €900 million per year resulting from a 4pc reduction in yield; 6pc quality losses; €120m in production costs and €360m in associated industries.