Reducing financial risk within the tillage sector

Teagasc has highlighted a number of ways by which Irish tillage farmers can reduce financial risk, as they look ahead towards 2023.

First off, having a spread of crops is crucial to reducing risk.

A Teagsc spokesperson further explained: “We experience more weather extremes now than in the past, and having a spread of crops helps to mitigate against this risk.

“Winter barley was disappointing in the south this year and it is tempting to throw all the eggs in the spring barley basket, but what if we get a late wet spring?

“And how often has winter barley been harvested and straw baled while rain has delayed spring barley harvesting and the subsequent losses that occur?”

Financial risk

According to Teagasc, growers should opt to make cropping decisions based on the five-year average yield for the farm, rather than the previous harvest.

The biggest source of the increase in input costs is fertilizer. On that basis, growers should make sure there is an up-to-date nutrient management plan in place for the farm, so that no excess fertilizer is used.

The Teagasc representative continued: “Remember phosphorus cannot be spread on a tillage farm in 2023 without a soil sample result showing that it is required.

“Organic manures can be used to replace chemical fertilizers and were very successfully used in 2022; both plowed-in and spread in crop.”

At today’s fertilizer prices, 1,000 gallons of cattle slurry is worth €50. Currently, protected urea is significantly cheaper than CAN and Teagasc trials show that it is equally effective once spreaders are set up correctly and tramline widths are not wider than 24m.

Many tillage farmers are reluctant to forward sell grain. Understandably everybody wants to sell at the top of the market, but if you are making money based on average yields for the farm at the price on offer, this will reduce financial risk to the farm.

As fertilizer is the biggest input cost outside of machinery and is often linked to grain price, maybe selling some grain when purchasing fertilizer could be worth considering.

According to Teagasc, beanscan be very profitable in 2023. This is due to the increase in protein payment.

Under the new Common Agricultural Policy (CAP), the funding for protein crops has increased from €3 million to €7 million.

As a result, the minimum protein payment for beans will be €350/ha and could rise to €500/ha if the targeted area of ​​20,000ha is not realized in 2023. As a result beans will potentially be the most profitable crop in next year.

Aside from the profitability, growing beans will reduce the fertilizer bill on the farm both for 2023 and 2024 where there is a lower nitrogen requirement for crops following beans.

Some of the best crops in harvest 2022 came after beans.

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