IFA National Grain Committee Chairman Liam Dunne said that the industry must support growers to get through what is a very challenging financial year as grain price offers of €140/t for green barley (excl. vat) are significantly below the cost of production and will leave many growers facing a negative income scenario.
Mr. Dunne said, “Input prices need to be realigned to reflect the significant fall in value of grain over the last two harvests. The viability of Irish grain production is in question due to the relentless increase in costs over the last few years coupled with significantly reduced grain prices for the 2013 and 2014 harvests. Over the last decade there has been very substantial increase in input costs particularly for fertiliser, seed and fuel. Fertiliser prices alone have increased by a massive 260% while fuel prices have gone up by over 200%. Variable production costs (including machinery hire) for spring barley have gone from €640/ha (excluding vat) in 2003 to approximately €1,000/ha today while grain prices are falling. Production costs for other arable crops have followed a similar pattern. This relentless cost price squeeze coupled with the impending reduction in growers’ Single Farm Payment, additional compliance costs due to CAP reform proposals and extreme price volatility threatens the future viability of Irish grain production. Changing weather patterns have also increased the challenge to growers as evidenced in 2009 and 2012.”
Liam Dunne said, “Marginal returns coupled with weather related production risks and increasingly complex compliance rules under the new CAP will force many growers to reconsider their enterprise choice. The industry, if for nothing else other than self-interest, must support growers to get through what is a very challenging financial year.”