Planning a path to profitability is not an easy task for cereal crops for the year ahead. The world is awash with grain, or so we are told. There is certainly a lot of grain around, but there are also increasingly big players in global market terms whose figures may be less reliable. That said, you can probably only be sure of €120/t for green spring feed barley in the next harvest and that forces real challenges and serious decisions.

There are four main things that growers can do to alter profitability:

  • Choice of crop.
  • Forward-sell on a high.
  • Get your average yield up.
  • Take out costs.

    • Crop choice

    This is often the least considered option in that some people only grow barley. It may not always make a difference to profitability but it can help as feed cereals are a real challenge for margin. The 2017 numbers in the Teagasc Crop Costs and Returns booklet suggest possibilities this time (Table 1). The protein premium is helping beans, while current high prices are helping oilseed. The margin numbers are before fixed costs, land rental or any margin for the producer.

    Beans have become popular again in recent years due to the payment of a protein support aid. The value of this can fluctuate either side of €250/ha, depending on the acreage grown, but the payment makes a significant difference to margin. But good yields are still important and this crop needs good fertility and heavier ground.

    Spring oilseed rape is a very good option due to price as oilseeds have moved in the opposite direction to grains. With new dry crop offers over €390/t, the green price of €350 should be available to anyone who commits to the price.

    Forward sell

    The experiences of 2012 continue to leave a sour taste because of the way prices moved post forward sales and the issues that emerged with quality and quantity.

    However, it’s time we got over that experience because it has cost growers a lot of money not to have forward-sold in recent years.

    While this is always a less attractive option in times of low prices, some selling should always be considered if price options occur that appear to defy the market trend of the day.

    It may not be the price you’d like but it may be a lot higher than what will emerge later in the season if the output forecasts come to pass. Price is about averages, so even when you sell a little, you can sell a little more tomorrow if the price rises. Occasionally, but only occasionally, will there be an offer that cannot be passed.

    Be careful not to over-sell. A good rule of thumb is to forward-sell no more than 50% of the likely crop before grain fill. By then, you will have a better idea of the potential of your crops but be conscious that potential yield does not fill trailers.

    If you have the option, consider selling some green and some dry. Green prices offer flexibility on quality spec which can be reflected in final price. Dry price contracts are far more rigid.

    Average yield

    Poor fields and bad patches pull down average yields. Anything you can do to help average yield will help profitability. Dropping poor conacre ground will have the biggest effect. After that, sensible choices like oats where pH is low or wheat or beans on heavier ground that does not suit spring barley, can help.

    Taking poor fields, or poor parts of fields, out of grain production helps yield and profitability because average yield is raised. The poor land might still be sown to a catch crop or something else that will help to improve the ground.

    Take out costs

    This is an important but not very instant action. We spent the past 20 years attempting to take out costs but all we did was try to optimise rates. These have since sneaked up again due to decreasing efficacy.

    Taking out costs implies acting to get rid of some of them completely in the medium to long term.

    Target grass weeds, especially the costly ones, initially. Stubble cultivation is essential, alongside specific sprays, in order to pull down weed numbers. Rogueing takes time but it can help keep more money in your pocket once you get numbers down. This takes at least 10 years to get tangible benefit so you need to start now.