Co-ops Must Set the Lead on Grain Prices

Young Farmer

IFA National Grain Committee Chairman Liam Dunne said farmer-owned co-ops must step up to the mark and lead the way in setting sustainable grain, oilseed and protein prices for growers this harvest.

Mr Dunne said, “We are now heading into the fifth season of low grain prices, which will result in another year of low, if not negative, margins for many grain farmers. While exceptional yields over recent years masked the income problem, a return to more normal yields this season will compound the income crisis.

“Current forecasts for the Irish harvest will see cereal production fall by over 250,000t due to a combination of reduced sowings and a yield reduction. The relentless pressure on growers’ margins has taken a heavy toll on the sector. This is clearly evident from the substantial drop of close on 52,000 ha in cereal sowings, which has occurred since 2012 when plantings were just shy of 315,000 ha. This trend will continue unless there is a dramatic turnaround in grain prices and growers’ incomes.

“So far this season private merchants have been more active in the market with their reps proactively chasing limited grain supplies. The merchants are leading the way on pricing with up to €148/t plus free transport being paid for green barley off the combine and €10/t to €12/t of a premium on offer for wheat. Co-ops, on the other hand, have been reluctant to quote and in some cases larger co-ops are selling off green barley at a discount to current market prices, effectively undermining the market.”

Concluding, Mr Dunne said, “Farmer owned co-ops must take a longer-term view and become more proactive in supporting the tillage sector as increasing focus is being placed by the market on the non-sustainable dependence on non-grain feed ingredient by-products for the manufacture of compound animal feed.”

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