Farmers are very aware of the growing costs that are set to confront Irish cereal growers over the next 12 months, Kieran Collins, Teagasc tillage specialist, has said.
Addressing a Teagasc Crop Forum event, Collins said cost challenges, including fertiliser prices, had been a key factor in the season just finished.
Collins said it was a worthwhile exercise to look back on harvest yields to put it in context:
“The 2022 harvest was marked by an increase in cereal yields. Winter wheat averaged 10.8t/ha and spring barley coming in at 7.9t/ha. We have also seen a big increase in grain price, up to €210/t.
“Adding to the levels of performance secured on farms this year was the excellent weather that persisted throughout the harvest period.”
Collins said many cereal growers had bought fertiliser early in the season and, as a result, had managed to avoid the rapid increases in prices that took effect later in the spring.
He believes there is more of a “level playing field” in relation to fertiliser now.
The Teagasc tillage specialist said, while fertiliser costs do continue to remain an issue, there are also other cost-related challenges that cereal growers are battling.
The Teagasc Costs and Returns publication is an indicative guide to crop margins in Ireland and is published annually, at the end of January.
In his presentation to the Teagasc Crop Forum, Collins referred to some of the estimates which will be published in the 2023 edition.
He said:
“Where costs are concerned, we have taken a 10% increase in costs across the board. Seed has been factored in at an average price of +€130/t for the 2022/23 season.
“We have also added 5% on to machinery cost for the coming year. These are based on contractors’ charges. Where fertiliser is concerned, Teagasc is costing 10:10:20 at €975/t and CAN at €860/t.”
Collins said in relation to forward grain prices, Teagasc has taken barley at €240/t, wheat at €250 and malting barley at €290/t.
He added that the authority is estimating the price of oats next harvest at €230/t with rape off the combine at €570 and beans at €300 while straw has been costed for 2022/23 at a value of €250/ha.
Collins said:
“The one exception to this is the scenario for winter barley straw. It normally commands a premium. So it has been factored-in at €300. Rape straw has been valued at €150/ha.
All these figures are based on the costings available through the straw incorporation measure.”
Based on the organisation’s projected costings and farm gate prices, Teagasc has taken the average five-year CSO yield averages and worked through projected combinable crop margins for 2022/2023. In relation to beans a 10-year average has been taken.
Collins believes the trends in the projected figures follow traditional patterns.
“Spring feed barley generates the lowest margin at €422/ha. Winter wheat and the higher value crops, such as malting barley, are at the other end of the crop margin spectrum.
“Winter oilseed rape is now a very high margin crop. This reflects the inherently high value of the seed produced.”
According to the Teagasc tillage specialist, beans should be very attractive in 2022/23 with a projected margin of €1,006/ha.
He said this reflects the value of the protein support payment now available.