This will be a year of significant change for many farms across the country. Issues worrying many of the more productive farmers – like CAP reform and new environmental policies – will finally be tackled this year.
While we may not like all of the changes that are thrown at us, it can be easier to plan when we have a complete picture of the path ahead.
2022 was a mixed year financially. Our tillage business has done well, with excellent yields and strong prices, offsetting the massive increase in input costs. The lack of rain during the summer reduced disease pressure on the crops and allowed us to reduce the amount of spray needed to keep them healthy.
It was like a continental summer and it reminded me why European farmers get so little opposition to proposals to restrict pesticides: they are not as dependent on them as we are.
Excellent sowing conditions for both winter and spring crops made field work a pleasure.
The harvest was completed with minimal effort and no interruptions from rain. Many tillers finished earlier than normal and plans for expansion seemed easy to justify.
The prospects for this year’s harvest are not that promising and there are no guarantees that we will be able to produce yields similar to those of 2022.
Many tillers, including myself, sell a portion of our estimated crop before harvest. However, futures prices for wheat and barley have fallen sharply in recent weeks: they are only €27/t above the level they were at this time last year before the Russian invasion of Ukraine.
Current prices are €122/t below their peak last year after the invasion and over €75/t below last year’s crop price.
With a winter crop of 4 t/ac, this represents a drop of €300/ac, with a significant amount of inputs being forward purchased at prices well ahead of this time last year.
With so much farmland either leased or leased on a conacre basis, the collapse in futures prices should be a major concern for landowners, tillers and policymakers. Existing long-term leases need closer attention as many arable farmers face reduced CAP payments due to convergence.
With the dairy sector having a stellar year, land rent prices are at record levels. Headlines for land leases in dairy regions are unattainable for the arable sector.
This is a good time for arable farmers to analyze their financial returns over the past three years and consider the changing market. Avoid using last year’s data alone to justify expansion.
The government has clear ambitions to increase the national arable land, and last year’s support for converting grasslands to arable land was welcome, but much more money and imagination is needed to increase the arable land this year.
Farming is not for the faint of heart, and the risks associated with such expensive inputs are greater than they have been for a long time.
Angus Woods is a drywall builder in Co Wicklow
https://www.independent.ie/business/farming/comment/why-tillage-is-a-riskier-business-than-ever-before-42242461.html Why tillage is a riskier business than ever