IFA National Grain Committee Chairman Liam Dunne has said the merchant trade must step up to the mark and support growers through a strong price for green grain this year.
“The industry must support growers through a strong grain price to get by in what is a very challenging year financially. If not, we will see a serious contraction of the industry over the coming years in the order of up to 50,000 hectares.
“Many growers, despite good yields, will be close to or have a negative income scenario arising out of the 2014 harvest. Current green price offers even at €140/t (20% moisture excl. vat) are below the cost of production. Many growers are questioning the long-term viability of cereal production given the seriousness of the income situation,” he said.
Liam went on to say that the trade, including plant protection product, machinery and fertiliser manufacturers, seed assemblers’ etc. needs to take a longer term view as, in most cases, the viability of their businesses is inextricably linked to the health of the tillage sector. “They need to recognise the gravity of the current situation, cut their margins accordingly and pass savings back to growers for the current season. Longer term, there needs to be a serious realignment of input costs to reflect substantially-reduced grain prices”.
He went on to say that marginal returns and weather-related production risks, coupled with converging payments and onerous compliance rules under the new CAP, are forcing many tillage farmers to reconsider their enterprise choice.