IFA warn against below-cost prices
He said a number of major trade buyers are trying to condition growers into accepting low prices on the basis that potential yield increases (which may not yet materialise) will offset any drop in prices. “When growers do their sums, it will become quite evident that they will be financially worse off at the end of this harvest compared to 2003.”
Mr Harrington said last year most grain was harvested at moistures ranging from 14% to 17%, which added €7.50 to €10/tonne to the value of grain.
“If weather conditions do not improve dramatically, it is likely that average moistures for barley will be closer to 22% and wheat closer to 25%, which will attract a penalty of €5 to €10/tonne.
“At the end of the day, growers may see the value of their barley discounted by €12.50/tonne and wheat by up to €17.50/tonne on the basis of moisture alone,” he said.
Mr Harrington said in 2003 green barley traded at €102 to €104/tonne and green wheat at €112 to €116/tonne.
Even at last year’s price and yield levels, barley growers will be worse off by €32 to €34/acre and wheat growers by up to €65/acre on a moisture basis alone.
“If current indicated prices for barley and wheat materialise, growers will suffer a further loss of up to €17/acre for barley and €45/acre for wheat.
