CROPS COSTS AND RETURNS 2008

CROP MARGINS

Awareness of crop margins is vitally important since under the decoupled regime the Single Farm Payment (SFP) will be paid irrespective of what crop is grown. Moreover, it makes no sense to produce the crop at a loss. The bottom line is that the land must be maintained in “good agricultural and environmental condition”.

Note: The margins shown here do not include the SFP. Prices may vary considerably from those predicted under the present volatile market developments.

The margins given here should provide a useful guide but land suitability, rotation, risk avoidance and convenience should also be considered. There is little difference in margins between spring and winter feed cereals. Bonuses for quality are important. In the case of malting barley the availability of contracts and fulfilment of contract requirements may limit the attainment of these margins.

Stacking (consolidation) is a provision where Irish farmers can get their full Single Farm Payment without the need to farm all the land they farmed in the reference years 2000-2002. At least 50% of the allocated entitlements from the reference years must be farmed. Farmers can only stack if they dropped rented or leased land, afforested land since 2000 or lost land due to compulsory acquisition for public good (CPO). Stacking applies to all farming enterprises. As over one-half of arable land farmed is on rented ground this provision has major implications for the price of rented land for tillage. Stacking may be availed of any year up to 2012. In future years the stacked grower may rent additional land (if profitable) without compromising his stacked (consolidated) entitlements.

Conacre appraisal The following table will provide a transparent exposition for growers and land owners as to what price can be paid for conacre.

Costs

Level of yield has a major influence on profitability. Decisions on input strategies must be tailored for individual fields and farms. Timeliness and attention to detail in carrying out all operations are vital to maintaining profitability in crop production. All costs (direct and fixed) need to be kept to a minimum, consistent with good husbandry practices. Fixed costs will need closer attention. In particular, investments in machinery and land/conacre will need thorough financial appraisal before a decision is taken. Labour efficiency must be scrutinised.

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