Volatility in grain prices expected to moderate in short term

GRAIN price volatility is here to stay but will moderate in the short term, the Teagasc national tillage crops forum was told in Newbridge, Co Kildare, yesterday.

John Bergin, R & H Hall, said the price volatility is linked to many factors but supply and demand are the big drivers.

Other factors to consider when managing a response to price volatility include production prospects, weather, the price of oil, currency movements and the global economic crisis.

He advised growers that the risks associated with volatility can be managed, to some extent, by having a marketing plan to sell grain at strategic times during the year. Based on each individual’s production costs, a price should be set at which they are willing to sell.

Mr Bergin was optimistic that prices will lift in the medium term due to concerns over food security as the world population increases and living standards improve.

The forum was against a background of one of the most difficult grain harvests ever experienced by Irish growers.

Jim O’Mahony, Teagasc, said the wet weather has impacted on grain quality and made harvesting extremely difficult, with most producers still trying to complete the work. This has been compounded by a significant decline in grain price.

Teagasc crops specialist Michael Hennessy said at current and expected grain prices the production of cereals can only be justified where high yields are achievable.

He said there is a need to change from the current practice of paying a lump sum for conacre, to a system of sharing the profits and losses between land owners and growers.

”It is very difficult to justify paying anything other than a token sum for conacre unless there is a good single farm payment included,” he said.

Mr Hennessy said Teagasc advisers are available to help both land owners and growers with these arrangements.

Patrick Butterly, AIB, said it would continue to support farming customers but he warned that any credit requests must be viable.

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