Decoupling looks better and better for grain growers

FARMERS are thinking of pulling out of grain growing because of low margins, it was claimed this week.

As the fine weather continued to boost harvesting, the IFA warned of concern among cereal growers.

Grain Committee chairman Paddy Harrington said the option of full decoupling now enables farmers to seriously look at exiting this low margin, high risk enterprise, unless realistic grain prices are paid.

He said Glanbia’s on account prices of €102/t for green wheat and €93/t for green barley are €9 to €12 below the market value.

Dried wheat for the week ending last Friday was trading at €139 to €141 collected ex store, with dried barley trading at €124 to €125.

This compares to €105 to €106 and €107 to €108 for dried wheat and barley, respectively, for the corresponding time period last year.

Mr Harrington said Glanbia’s grain suppliers should demand at least €100 and €110 for barley and wheat, respectively, at a time when the majority of grain buyers are paying €98 to €102 for barley and €108 to €112 for wheat at 20% moisture, excluding VAT”.

The IFA man said despite attempts by two major buyers in the north east to drag grain prices down over the last number of days, other private merchants have taken this opportunity to poach grain, quoting €102 to €103 for green barley and €112 to €114 for green wheat.

Mr Harrington said wheat yields have been very variable and disappointing this harvest, ranging from 2 to 4 tonnes per acre. Spring barley yields have been less variable, but the average will be closer to 2.3 to 2.4 tonnes.

“Returns from grain growing this harvest will be marginal, despite a lift in prices. Many committed growers are now seriously questioning whether there is a future in cereal farming,” he said.

Meanwhile, European grain prices have continued to climb, following yet another downward revision of yield estimates in France.

The French farm ministry now says severe dry weather has pushed domestic soft wheat yields 20% behind last season.

The ministry also slashed its forecast for maize grain production, and predicted a total French grain crop to 56.54m tonnes, almost 20 percent down last year.