The cost of fertiliser will be a subject that dominates tillage farmers’ thoughts over the coming weeks and months.
However, according to Teagasc’s Ciaran Collins, this is an issue that will put everyone on a level playing field throughout the early stages of 2023.
Speaking on a recent Tillage Edge podcast, he explained that a number of growers had bought fertiliser relatively cheaply prior to the escalation of costs that took effect after Russia’s invasion of Ukraine.
“Quite a number of growers had fertiliser on-farm last spring at reasonable prices. However, this time around, such will not be the case,” Collins said.
“Basically, everyone is now on a level playing field.”
Collins went on to point out that all tillage farmers will be drawing up plans for 2023 with the full price of fertiliser factored in.
“So, we are looking at CAN [Calcium Ammonium Nitrate] in the range €800-850/t with urea hitting between €900/t to €1,000/t,” he further explained.
“Those costs are going to be there for everyone. Fertiliser represents one of the biggest costs incurred by all tillage farmers.
“Seed and fuel costs will also be significant for growers in 2023.”
Tillage farms
Teagasc is currently factoring in a 5% rise in machinery costs, year-on-year. However, this figure may strengthen further as we approach the spring period.
Where agrochemicals are concerned, Teagasc is predicting a 10% increase in costs across the board for 2023.
“This figure has to be determined fully,” Collins continued. “But sprays will be significantly more expensive in 2023 than was the case last year.”
So on the basis that Irish tillage farmers can look forward to securing normal yields during harvest 2023, what kind of prices will they need to receive for grain in order to cover their crop production costs?
“Where winter wheat is concerned, the five-year average yield comes in at around 10t/ha,” Collins explained.
“Total costs will probably amount to €220-225/t. This is not such a daunting figure relative to last year’s harvest prices.
“But on the basis of the forward prices available at the moment, margins will start to get very tight.
“Spring barley works out on a similar basis. The average five-year yield is in the region of 7.3t/ha,” he added.
“This works out a production cost for 2023 at €215-216/t. So the bottom line is that we do need good yields and good prices in 2023.”
Collins also pointed out that the price of straw will/should cover the fixed costs incurred by growers.