Tillage farmers should focus on keeping their costs of production in check in 2016, as the market looks set to be difficult, according to Teagasc’s Tillage Advisor Ciaran Hickey.
Speaking at the Teagasc Spring Tillage Seminar in Co. Wexford recently, he said there is very little farmers can do about the price they receive for grain as they are supplying a volatile world market.
“Ireland is a small player in a very volatile market, with stocks plentiful across the world and the currency advantage currently with Brazil, Argentina, Russia and Ukraine, there is not a lot of positive news.
“But tillage farmers should know their costs of production as even within a tight market there are spikes in forward selling prices,” he said.
Hickey said that all tillage farmers should complete profit monitors, as this will allow them to see where they can make improvements to their business.
“Profit monitors are a standard practice in the dairy industry and they can benchmark their performance from one farm to another. It gives farmers the key figures to point their business in the right direction.”
He also said that one of the biggest costs on tillage farms is machinery, and so, tillage farmers should complete a machinery cost calculator.
Everyday you walk out into the yard, you can be sure of one thing, the value of your machinery is falling. Machines very rarely accumulate value.
“Anyone who does not charge a cost to machinery from the production of grain is just wearing out their machines,” he said.
Hickey said that Irish farmers have a massive amount of money invested in machinery, with it being the most variable cost across all farms.
“We probably have very few farmers in Ireland that are under equipped, most are over equipped,” he said.