Teagasc is attributing its predicted fall in tillage incomes this year to a number of factors.
Head of Crops Knowledge Transfer Department with Teagasc, Michael Hennessy was speaking on this week’s episode of the AgriFocus podcast from Agriland, which focused on tillage.
According to the Teagasc representative, up to 70,000ha of land will be included within the 2023 Straw Incorporation Measure. This is considerably up on previous years.
“It’s a phenomenal figure,” Hennessy commented.
“The Straw Incorporation Measure is very positive, primarily from the point of view that it allows farmers to put a valuable manure source back into the soil.
“And there will still be enough straw to go around when it comes to meeting the needs of livestock farmers.”
Grain prices
According to the latest figures from Teagasc, projected tillage incomes will be down by a factor of 50%, year-on-year.
Michael Hennessy attributes this fall to a number of factors.
“There was an awful lot of expensive fertiliser put on to crops during the early months of 2023,” he said.
“There is also a lot of very expensive fuel in the system as well. This reflects the fact winter varieties constitute more than half the cereal crops grown in Ireland.
“These would have been planted last autumn, at a time when fuel prices were at their peak. Basically, all input costs have increased for tillage farmers this year,” he added.
Combined with these factors has been the reduction in grain prices.
“Last year we were looking at prices in the region of €300/t; today the price is closer to €200/t,” Hennessy continued.
“This is the scenario for grain. Where oilseed rape is concerned, we are talking of a price drop in the region of €150/t.”
“This is having a massive impact on tillage margins. On top of that we are also looking at a fall-back in yields,” he said.
“Grain tonnages in 2022 were extremely strong. Last year we had a combination of great yields, great weather and great prices. This time around, we don’t have the weather while yields and prices are only modest.”
Grain and oilseed prices are determined by global supply and demand.
“It’s all about what’s in store right now and what’s likely to be harvested over the coming months,” Hennessy continued.
“Ukraine represents 10% of the grains traded internationally. Irish farmers work on world price.
“The recent bombing of Ukraine’s Black Sea and Danube ports has probably boosted grain prices by around €15 to €17/t.
“But there is still an awful lot to be played for in terms of the overall harvest. This is particularly the case, where the United States is concerned.
“Conditions have been quite dry there of late. No one really knows how much grain will come out of America over the coming months. This is the bit that still has to be played for,” he concluded.
You can listen to the full interview on the AgriFocus podcast by clicking here.