Farm Ireland

Tuesday 20 February 2018

Understanding futures markets can pay dividends


Noel Delany

Setting of winter barley finished at the weekend. My winter barley acreage will be up from 130ac to 200ac for next year. Yields this year were excellent, with an average of 3.7t/ac.

I set a mixture of early-, mid- and late-maturing varieties in order to spread next year's harvest over a few weeks. I went with the six-row early Sequel, mid-season Leibniz and the later-maturing Cassia.

I intend to sow winter oats on contract for Flahavans this week. I'm increasing acreage from 80ac to 130ac, even though my entire crop was burnt by frost last year. I'm taking a chance that this winter won't be as severe as last year.

I looked at the Mascani, Dalguise and Tardis true winter oat varieties but their quality was not good enough to convince me to use them. Mascani, even though it is a winter variety, was still killed by the frost last year and the spring variety Circle also got burned out. Husky is my main choice for next year because it performed well despite the cold conditions last winter. It yielded exceptionally well when sown last spring, with bushel weights of 63kph.

I will sow some oats this autumn on south-facing high ground, but I will hold off sowing the lower ground in the valley until spring because if we do get severe frost, it will be worse there.


My wheat acreage is down from 130ac to 100ac for next year, purely for rotational reasons. I have given up on continuous wheat because the difference between first wheat and continuous wheat was about 1t/ac when I did the figures.

The continuous wheat fields averaged 3.5t/ac, while the first wheat crops did 4.5t/ac. That's a big difference. My wheat will consist of Grafton, JB Diego and the English variety Invicta, which is not on the Department of Agriculture's recommended list but I like it.

Also Read

I hope to close the gates on the sowing season by the middle of this month. Herbicides -- IPU and DFF -- will be applied from the middle of next month to the earliest sown crops and continue through the fields as the crops emerge. I will follow up with an aphicide and nutriphite to promote root development in November.

I make sure all the crops are sown into a fine, firm seedbed so that the plants can grow and develop as well as possible. My pre-sowing regime is to plough with a six-furrow reversible plough, followed by a levelling cultivator, sowing with a one-pass system and then rolled.

Farmers at the National Ploughing Championships last week were being cautious about the tillage scene for the next 12 months. Yes, we got a good year in terms of quality crops and good yields but input costs are on the increase.

There is talk of €350/t for CAN early next year and urea going up to €400-450/t. Last year I bought my CAN in October but this year I'm sitting on the fence, hoping that prices will come down.

Fuel prices are also up 25pc this year, from 60c/l 12 months ago to 74-75c/l this year.

We had a bumper year in 1984 but that was followed by wet summers and Hurricane Charlie in 1985 and 1986. High diesel prices in a bad year can make it extremely expensive to dry grain.

People are talking about conacre prices of up to €260/ac around here but there is scare mongering going on about this 2014 reference year. These are only leaked proposals and farmers should not get carried away.

Land rental is the only cost that is within our control. We can't do anything about diesel, fertiliser or chemical prices but we can control land rental figures. There is no point in giving away the money we managed to make on our crops this year.

Futures wheat prices for November 2012 are around €178/t dried at the moment and I monitor them regularly.

I started forward selling grain in March this year, selling 100t lots up to mid-June. The idea is simple: if you know your costs, you will know what price you need to make a margin and, when you reach it, you lock in.

The futures market is a superb management tool that farmers in Ireland are only getting to grips with now. We know how to grow our crops properly, so now we need to perfect the marketing of our grain.

Noel Delany is IFA grain chairman and farms in Fethard, Co Tipperary

Indo Farming