This article is not a nice one to write or read. Tillage farmers are likely to lose money on their crops this year, some more significantly than others, and some will not be able to clear their bills with their produce.

The mood among farmers is understandably low. The weather has caused issues all year, from autumn and spring planting to the dry weather in May and June, to the wet July and unsettled August. The loss in income will not be a surprise.

However, we must focus on the positives and look forward to make changes. It is also important that we highlight these issues to the Government, who want to increase the area of tillage and make the powers that be realise that this does not happen by talking. It happens with changes.

Wanting to increase tillage area is all fine and grand, until the co-op or merchant bill cannot be cleared.

What are the causes?

Aside from the weather mentioned above, which hit crop yields badly, farmers faced high input costs and are now looking at grain prices over €100/t below last harvest’s finish. Although, it should be noted that harvest price is yet to be settled and remains a big question mark in these figures.

To investigate the possible outcomes of lower yields, high costs and lower prices on farmers, we have taken the Teagasc costs for 2023 (Table 1).

Using Irish Farmers Journal surveys with agronomists across the country and talking with the wider industry, we then placed an estimate on cereal yields and calculated grain income based on grain prices of €200/t for barley, €282/t for malting barley, €215/t for wheat and €195/t for oats.

It should be noted these prices will be adjusted with moisture bonuses or deductions. Many moisture levels were high this year, so money will come off the price in that case.

These prices are being used as a guide to help people make their own calculations.

Harvest prices most likely won’t be finalised until the end of September or early October. Some people will have forward sold grain as well, so they will need to alter their calculations to their own prices and percentages sold.

As you look at the figures, there will be many variables. Some may have purchased fertiliser at higher or lower costs than listed. Farmers will need to adjust yields to their own figures. Teagasc has used contractor charges as the machinery costs. Some will have significantly lower costs, although many will be similar to those listed.

Straw income was placed at €250/ha - the Straw Incorporation Measure (SIM) payment.

However, many people who sold straw are probably not receiving this income, as straw yields were low and prices did not cover costs for some. Four bales/ac at €20/bale leaves you short €20/ac, along with costs, that could have been gained from the SIM.

Profits based on owned land and on rented land are listed. Land rental costs were put at €250/ac. However, many will be paying much higher than this, so once again, you should adjust to your costs.

Profits

Looking at Table 2, the profits for each crop at the Irish Farmers Journal’s estimated yields are listed on owned land and rented land.

It should be noted spring barley has been divided into two sowing dates, as crops differed hugely in yields depending on the time they were planted at, and there is also spring feed and malting barley.

At the Teagasc costs, and using estimated grain prices, winter barley and late-sown spring feed barley are at a loss of €4/ha (€1.60/ac) and €299/ha (€121/ac) respectively on owned land.

Spring wheat is losing €86/ha (€35/ac). Early-sown malting barley, which passed standards, delivered the highest return at €908/ha (€368/ac).

However, when land rental costs are added in all crops apart from early-sown malting barley make significant losses.

It should also be noted that large numbers of farmers’ malting barley failed to meet standards, so the number of farmers who will significantly benefit from growing malting barley this season is small.

It really is something that needs to be looked at, as brewers and distillers talk about and advertise sustainability while farmers carry huge levels of financial risk.

Convergence on CAP payments

Tillage farmers will be eating into their BISS (formerly BPS) payment to pay bills. That BISS payment is being hit by convergence and will go down significantly over the five years of this CAP.

For example, a farmer who had a BPS and greening payment of €317/ha on 61ha in 2022 will lose €2,055 off their total payment in 2023. From 2023 to 2027, they will be down a total of €12,571 due to convergence.

Positives

The crop figures are detailed for cereal crops. While some oilseed rape yields were low this season, many farmers faired okay from this crop.

Beans are currently being harvested and the Protein Aid Payment will bring in €420/ha to farmers.

However, this is lower than expected due to the massive rise in protein and mixed protein crop area. Strong minimum prices from co-ops are a huge help for beans as well.

What next for farmers?

  • Many still have to finish harvesting crops and gathering straw, so this is a priority.
  • Do up your costs and returns for this season and see what crops performed best.
  • Farmers need to look forward and develop a cropping plan to try and maximise their return. For instance, plant an area in protein to receive the payment. Focus on break crops to improve yield in other crops. Enter straw in the SIM to guarantee income.
  • Get back out into the fields preparing for next season, and make progress, whether that be cultivating stubbles, spraying grass weeds or starting to plough. Rye might be a crop you are planning on for next year and can be planted from mid-September, but be conscious of grass weeds.
  • Talk to your advisers and to other farmers. Last year was a great year on tillage farms, and next year could be a good year again. There will be difficult years in farming, but there will be positive ones too.

    • What next for Government?

  • If another farming sector was in trouble, aid would be granted. There are some talks in the industry about asking for exceptional aid for this year from Government, similar to the Fodder Support Scheme.
  • If the tillage area is to increase, then it is no different to organics – money needs to be put behind it and a flat rate payment may be needed to maintain area, not to mention increase it.
  • The Tillage Incentive Scheme needs to focus on tillage farmers. To do this, the reseeding element needs to come out of it. We are not going to increase tillage area if the land is under-sown with grass. The €400/ha payment is helping grassland farmers pay for rented land, so the focus needs to be on tillage farmers who are struggling to access that land. Around 12,000ha of tillage land was planted with grass this year.
  • The increase in the SIM budget needs to remain.
  • The Protein Aid Scheme could be reviewed. The protein cereal mixed crop has taken a significant chunk out of the budget this season. Perhaps these should be two separate budgets.