Recovery in grain prices is vital for the sector’s future, warns IFA

AS the harvest gets under way in earnest, the IFA has warned that a sustained recovery in grain prices is necessary if tillage farming is to survive.

Work on the main harvest of spring barley, wheat and oats totalling 225,000 hectares is due to commence in the next 10 days.

Normally, the winter barley crop would be cut at this stage, but broken weather in July has hampered the work.

The quality of the winter barley crop of 28,000 hectares is reported to be excellent, but yields are back 10% because of the extreme weather late last year and during the spring.

IFA president John Bryan said tillage farmers have come through two of the most difficult harvests in decades. They have had to contend with the extremes of weather during the 2008 harvest and prices that were significantly below the cost of production last year.

“No sector can survive a negative income situation for three years in a row,” he said.

Mr Bryan said extreme weather conditions in the northern hemisphere, which produces 80% of the world’s grain, have had a devastating effect on crops in Russia, the Ukraine and other parts of central Europe.

“This has reduced the availability of grain and is leading to a stronger price elsewhere. Grain growers will still be operating at prices from 25 years ago, while their costs have increased significantly during that time,” he said.

Mr Bryan said it is critical that the trade passes back the full lift in prices to growers so they can recoup some of the losses incurred over the last two seasons.

“Tillage farmers’ confidence is at an all-time low. Any attempt by the trade to undermine prices paid to growers would see further significant diminution in the area sown to arable crops for the 2011/12 campaign. This year alone over 35,000ha was taken out of grain production,” he said.

IFA Grain Committee chairman Noel Delany said that a significant weather premium has developed for grain over the last three weeks.

December dried feed wheat contracts have been offered to growers over the last week ranging from €160 to €166 tonne, equating back to a green wheat price of €130 to €135 tonne.

Green barley prices are ranging from €116 tonne to €125 tonne, with further deals on moistures and transport.

However, a number of deals have been done at prices ranging from €125 to €130 tonne for barley at moistures ranging from 17% to 19% moisture.


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