Weather is the main agenda item on the farm at the moment. The 10mm of rain we were hoping for last week fell as only 7mm, and this fell over a two day period lessening its ability to break through into the root zone. Today we fire up the irrigators for the first time this year and while they are expensive to own and run, they are essential, even in a country like Ireland.
Our business is predominantly root crops and as such we have a high demand for equipment. All of this is fine but it’s sometimes easy to lose sight of your cost base as a "must have" rather than a "need to have" mentality takes over.
Farmers are often demonised for “factory farming” or large scale farming but the reality is that’s the only way to survive. Keeping sight of cost base and cost per tonne is difficult. We went through a tough period with weather the main factor between 2008 to 2011, during which we became very lean and cost effective. With stability returning, costs are now rising.
Keeping costs down is not my favourite job - it’s always fun to buy new equipment and have that extra man around to make life easier but in real terms, this often doesn’t pay. Both industries we are growing for suffer from cost base issues, cereals on a global scale and vegetables on a domestic scale.
While the general public demands cheap food, they also demand we farm it in a way that fits with their ideals of a quaint country farm. As the costs at the till go down, so too must the cost at the farmgate. The only issue for farmers is in order to get the cost at the farmgate down, we must invest huge amounts of capital to improve our efficiency and lower our cost base.
This increased investment demand is pushing farmers further and further into the danger zone with huge financing repayments hanging in the ether at year end, regardless of weather or yield. The sad reality is the drive at retail level for lower cost produce is going to break a lot of farmers over the coming years.
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