Low Prices Will Accelerate Cereal Wind Down – Downey
Speaking of the final day of the Ploughing Championships, IFA President Eddie Downey said that current grain price offers are below the cost of production and this will accelerate the wind down of cereal production as many growers reach the end of their tether. “Incomes have been on the floor for the last three years and this has been reflected in sowings, with the cereal area has fallen by close on 90,000 acres.”
Mr Downey said, “Some larger buyers are sending a clear market signal to growers that they are not seriously interested in the long-term viability of grain production, but are happy to sell inputs at prices that are unaffordable. These buyers are attempting to talk down the price as the harvest moves to a close while many of the smaller and medium sized merchants in an attempt to support growers are paying €140/t for green winter barley (at 20% moisture excluding vat), €4/t to €5/t under for spring barley and €7 /t to €10/t over for winter wheat”.
“Merchants and input suppliers need to wake up. Grain farmers’ incomes have been on the floor for the last three years despite good yields. Current offers for green and dried grain are significantly below the cost of production and this is threatening the long-term viability of the sector. The grain and feed trade needs to take a more strategic long term view of the sector, step up to the mark and support growers with a strong price for grain this year. The relentless price cost squeeze is not sustainable.”
IFA National Grain Committee Chairman Liam Dunne said, “The EU Commission must get off the side-line and take decisive action. Large multinational nitrogen fertiliser manufactures have taken farmers to the cleaners boosting their profits at a time when growers’ incomes have gone through the floor. Despite the collapse in crude oil and gas prices CAN manufacturers continue to push through unjustified price increases. The EU Commission must now take swift action and instigate a sector enquiry into the fertiliser industry and immediately suspend customs duties on imported fertilisers. EU Commissioner Phil Hogan must realign CAP policy so that it can deliver viable incomes for farm families while addressing environmental issues. The current policy is flawed, ignores market realities and undermines sustainable crop production.”