Grain growers can’t afford another year of losses
Latest Teagasc estimates put the fall in gross margins for the main crops, winter wheat and spring feeding barley at 93 per acre and 67 per acre, respectively. Jim O’Mahony, Chief Tillage Adviser, Teagasc, predicted last week that when Teagasc complete their analysis of farm management accounts, the outcome may be even worse.
Lower yields and price cuts combined to make 2002 one of the worst years ever for cereal farmers.
Jim O’Mahony said, “Sufficient land is important for income, because margins per acre are low. However, conacre prices must be critically evaluated in the light of lower grain prices and increased costs”.
“The maximum price for good quality grain conacre must ideally be about 100 per acre, for reasonable profit. Financing crop inputs and conacre will be an important aspect of management”, he advised.
Mr O’Mahony said growers of barley and winter wheat were hit by an average drop in yields of 0.6 tonnes per acre in 2002.
Meanwhile, prices fell 10 per tonne for feeding barley and 20 per tonne for feeding wheat, compared to the 2001 green harvest prices, knocking growers’ returns by 30 to 80 per acre. Costs of inputs, including seeds, increased also.
Mr O’Mahony has urged growers to be cautious in 2003.
“Decisions on input strategies must be tailored for individual fields and farms. All costs, direct and fixed, need to be kept to a minimum, and fixed costs will need to be addressed closely”.
“Investment in land, machinery and conacre will need thorough financial appraisal before a decision is taken”.
He has also suggested that some tillage farmers may consider alternative, non-cereal cropping for some of their acreage in 2003, to spread the risk.
