Farm Ireland

Saturday 20 January 2018

Viewpoint: Cereal growers may be left empty-handed by year's end

Farmers are being offered a harvest price of €115/t for their barley.
Farmers are being offered a harvest price of €115/t for their barley.
Darragh McCullough

Darragh McCullough

Could cereal growers be left with nothing but their EU payments at the end of this year, even on owned land?

That's the way it's looking. I got a shock when I looked at Teagasc's excellent cereal crop margin calculator app this week. When Tim O'Donovan was doing his costings for 2016 last Christmas, there was still hope that green grain prices would be 135-145/t for barley and wheat.

Since then the price slide has continued, to the point that some farmers are being offered a harvest price of €115/t for their barley.

At this price, even if you do everything right and hit the target yields of 3.25t/ac and sell your straw for €40/ac, you will dearly pay for the pleasure of growing the crop, to the tune of €58/ac.

Naturally, if you have to pay for land rental on top of this, you move even deeper into the red zone, to the point that no EU farm payment is going to cover your losses.

And yet, auctioneers tell me that they will have no problem getting farmers to bid on conacre this spring.

"Land that was making €180/ac last autumn will still make €140/ac this spring," claimed Meath-based auctioneer, Thomas Potterton.

It would make far more sense for the farmer to sit back and let somebody else lose their shirt on the punt.

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Even if growers have extra entitlements to activate, new rules allow them to lease out the entitlements without any land attached to another farmer for 12 months - exactly the same way conacre operates.

Well-known entitlement traders, the McGees of HMG in Kells say that there's a ready market for entitlements, especially those worth more than €300/ha, before the 30pc greening top-up is included.

"Farmers are getting 60pc of an entitlement worth €300/ha, while up to 70pc is available for an entitlement worth €400/ha," said John McGee.

Things have got so bad that advisors are even telling farmers with their own land to think hard before planting any more cereals this spring.

It's at crisis points like this that we need everything to be on the table. For example, fertiliser prices are totally out of sync with the price of grain, and the IFA are campaigning hard to get EU import tariffs on fertiliser reduced.

But a longer term solution would be a change in mindset among the authorities here to allow farmers to make better use of the resources that they already have at hand.

Human sludge, known in the trade as biofert, is widely used on cereal crops in Britain without any implications for the quality assurance of the grain.

It would immediately reduce the cost of fertiliser to farmers by 33pc. But Irish farmers can't use it because it is not accepted by Bord Bia. Surely there has to be a better way to allow us to make the most of our own resources?

Indo Farming