Grain price recovery critical for the survival of the tillage sector

With the main harvest of spring barley, wheat and oats totalling 225,000 hectares due to commence in the next ten days, IFA President John Bryan said that a sustained recovery in grain prices is necessary if tillage farming is to survive in this country.

The quality of the winter barley crop of 28,000 hectares is excellent, but yields are back 10% because of the extreme weather late last year and during the Spring. Normally, the winter barley crop would be cut at this stage, but broken weather during July has hampered the harvest.

Mr. Bryan said, “Tillage farmers have come through two of the most difficult harvests for decades having had to contend with the extremes of weather during the 2008 harvest and prices that were significantly below the cost of production last year. No sector can survive a negative income situation for three years in a row.”

He said, “extreme weather conditions in the Northern Hemisphere, which produces 80% of the world’s grain, have had a devastating effect on crops in Russia, the Ukraine and other parts of central Europe. This has reduced the availability of grain and is leading to a stronger price elsewhere. Grain growers will still be operating at prices from 25 years ago, while their costs have increased significantly during that time.”

John Bryan said, “It is critical that the trade passes the back the full lift in prices to growers so they can recoup some of the losses incurred over the last two seasons. Tillage farmers’ confidence is at an all time low and any attempt by the trade to undermine prices paid to growers would see further significant diminution in the area sown to arable crops for the 2011/12 campaign. This year alone over 35,000 ha was taken out of grain production.”

IFA National Grain Committee Chairman Noel Delany, said, “A significant weather premium has developed for grain over the last three weeks. December dried feed wheat contracts have been offered to growers over the last week ranging from €160 to €166/t equating back to a green wheat price of €130 to €135/t. Green barley prices are ranging from €116 to €125/t, with further deals on moistures and transport. However, a number of deals have been done at prices ranging from €125 to €130 for barley at moistures ranging from 17% to 19% moisture. Both farm to farm trade and enquiries are up on last season on the back of tighter than normal fodder supplies.”