It’s one of those tough times in farming. Prices have been trending in the wrong direction all year and there’s little sign of recovery.

While it was universally acknowledged that the record prices of 2023 were a bubble that would not be sustained, there were hopes that a new floor - higher than before - would be achievable.

There was also hope that markets - dairy markets in particular - would recover towards the end of the year, but that no longer looks likely.

Locked prices

When the fixed milk price issue was raging in Tirlán, farmers did not want a proportion of their milk to be locked into a 38c price average for 2023 and 2024.

It was said to me by those in Tirlán that such prices might look decent before 2023 was out - and so it has proven.

In fairness, that was a complex issue, with trust as big an issue for the affected farmers as price, but it just shows how far prices have fallen.

Fixed milk price schemes are currently offering little more than the ones that came before the Russian invasion of Ukraine, which was the main protagonist for the sudden sharp spike in prices.

Grain prices have stayed further from their previous floor than other commodities. The price of feed barley went from €140/t in 2019 to €160/t in 2020, then up to €220/t in 2021 before spiking to €310/t last year. This year’s price is likely to be close to the 2021 mark, well clear of 2019.

Grain and straw yields are well back

It needs to be. Grain and straw yields are well back and a variety of quality issues are seeing a lot of malting barley fail specification tests, ending up on the feed heap at a cost of close to €100/t (for the 20% of my tonnage I forward sold at €320 in the spring).

Growers faced difficult decisions as whether to cut or hold off in recent narrow weather windows. Our own barley was a case in point.

Last weekend, we took some samples. The protein was way over the upper cut-off of 10.8%, mainly due to green grains from secondary growth that occurred when the parched crop was given the lifeline of rain in late June following a six-week drought.

The choice was whether to cut and face certain rejection or wait a week or more for the green grains to mature.

Fusarium

The problem was that the crop, like a lot of the Planet variety, was breaking down. That would lead to yield losses, but also to fusarium affecting the crop, particularly when humidity is so high.

For the crop to pass muster for malting, I would have needed the green grains to either mature and fill or mature and shrink to go out the back of the combine as chaff, but I also needed the crop not to break down, develop fusarium or sprout, which would affect germination.

There is only a tolerance of 2% in terms of germination - if three grains out of 100 have sprouted, it’s a fail.

I wanted to wait, not least because it would mean a potential price bonus of €200 to €300/acre, but also because the local merchant would also lose out if I failed to deliver.

However, I felt there were too many potential downsides to waiting, and so decided to cut.

We selectively cut headland and tramlines, where green grains were more conspicuous, separating the best grain to hopefully pass for malting.

This strategy, which seems to be popular judging by the stripes I see in cut fields, did mean that 16t passed for malting. For context, our contract was for 150t.

What was cut so far was sown in a narrow window on Easter weekend (April 8/9). It’s unlikely that any of the later-sown barley will pass - there’s a lot of green grain in it. That could see me only supply 10% of my contracted tonnage, and a lot of farmers are in a similar situation.

Implications

Once upon a time, farmers might have chosen to spray off such crops with glyphosate, killing the green grain, but that is prohibited now. I’m not passing judgement on that decision, but it is another tool in the toolbox taken from farmers, with financial implications.

Of course, tillage is a minority sport. To a lesser extent, it could be said dairy farming is too, with 17,000 dairy farmers - three to four times the amount of tillage farmers- only thirteen percent of the total number of Irish farmers.

Both pale in comparison with the 100,000 Irish suckler, cattle and sheep farmers. Pig, poultry, fruit and vegetable farmers number in the hundreds and farmer numbers in all those sectors are shrinking every year.

For sheep farmers, frustration is growing over current prices. With meal expensive and watery grass running through lambs, finishing is difficult and expensive.

Lie-back implementation

The prospects for stores are bound to be affected by the frankly over-zealous regulation that cover crops need a lie-back of at least as big an area if they are to be grazed.

As cover crops are on tillage farms, I wonder where the lie-back is meant to come from. I really wonder sometimes if the implications of such arbitrary decisions are thought through before implementation.

And as for cattle prices, markets are starting to resemble 2019. I can’t see farmers heading for the gates like they did back then, but with costs still high this year, there is no margin worth speaking of for cattle farmers this year.

Only one solution in sight

Input costs have dropped from their spike in recent months, but not before making 2023 the second-most expensive year to farm in history.

They may drop further, but the medium- to long-term prognosis for fertiliser price and availability is that it will get more expensive.

With a close link between fertiliser prices and grain prices, that will probably mean feed prices will continue to squeeze margins for livestock farmers.

The reaction of farm organisations is to call for schemes and supports from Government and Brussels. It’s understandable, as this is how the whole economic ecosystem of farming has evolved.

Input costs are likely to continue to rise in the medium to long term. 2022 was a window into the future. / Donal O' Leary

Farming has no control of the marketplace, so when product prices fail to cover costs, either the CAP fills the gap or farmers go broke.

It’s been this way for decades and is a direct result of the CAP’s determination to deliver a guaranteed supply of affordable food of high quality. The casino is rigged for farmers, the house never loses. Who is the house? The consumer, via the retailer and to a lesser degree the processor.

What’s the solution? That’s easy to diagnose, impossible to deliver. If the problem is that food producers don’t have a sustainable margin (and it is), the solution is for that margin to increase. Food prices are too low. Food is too cheap. Food is not priced in a way that properly accounts for the true economic, resource and environmental cost of production.

We saw food prices increase last year, but there was a difference to most years in the market’s dynamic. Yes, food prices rose sharply in the shops, but, for once, food prices rose by a much higher percentage at farmgate level. And guess what? There weren’t protests in the street. Retailers didn’t go broke.

Processors and retailers are doing just fine, thank you very much

There are a large number of compelling reasons for farm gate prices to go up, and for that commodity price increase not to be matched by similar percentage price increase at processor and retailer level.

Processors and retailers are doing just fine, thank you very much - they don’t need such a price hike at their end. They have been steadily and systematically increasing their respective proportions of the price consumers pay for food of all types for half a century now.

But farmers need a price hike. They need it because they no longer have the option of increasing intensity. Rather, farming needs to de-intensify to a greater or lesser degree depending on enterprise and system.

Chemical fertiliser and pesticide usage must be reduced. Peatland must be managed differently, some of it will have its water table adjusted. Buffer zones, space for nature and trees will all need acres and hectares and field margins.

If milk price was at 55c/l, feed grain was at €300/t, lamb at €9/kg and beef at €7.50/kg, we’d have an entirely different farming landscape. Those prices could be conditional on farms achieving a minimum standard of environmental attainment.

Support

And imagine if organic farming had the support of consumers to match that of the Government - pumping €250m of finds from this CAP cycle into the sector?

I don’t think it would be too hard to persuade farmers to produce organic meat and milk if it had a significant price margin in place. We only need to look at malting barley to see how farmers will reach to meet standards where the market rewards them for their efforts.

The treadmill of scale and intensity could be swapped for a pattern of sustainability and investment in natural production systems. For smaller holdings, fruit and vegetables - properly paid for - could deliver a living wage.

The marketplace has no morality, so this will only happen if consumers want it to happen. And, thanks to the freak year of 2023, we now know that the system wouldn’t collapse if full-time farmers were consistently paid commodity prices that gave them an income approaching the national average wage.

And perhaps more farmers could become full-time, instead of trying to juggle two jobs purely from a love of the land and all it produces.

An added benefit would be a reduction in the appalling level of food waste in Ireland and across Europe, with conscious consumerism the new normal.

Grim reality

You may say I’m a dreamer, to quote John Lennon. But the grim reality is that if society doesn’t pay realistic prices for food to the primary producer, the whole system will unravel. It’s already creaking at the seams.

Just as 2022 was a warning from the future as to where input costs will eventually go, 2019 and the beef blockades were a warning as to how close to breaking point primary producers are.

As Sherlock Holmes observed, “when you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth”.

And the truth is that the fundamental problem undermining food production is that food is too cheap. It is impossible to survive if we eliminate farming, so we must start paying farmers a living wage.

Sorry for preaching, but we are running out of time to properly address this issue.