IFA National Grain Chairman Liam Dunne has said that the trade must step up to the mark and support grain prices this harvest as growers’ incomes remain on the floor for the third consecutive harvest.
The prices for dried grain for November / December collection have strengthened considerably in recent days and this must be reflected in the price paid for green grain. Unless the trade sends a strong price signal to growers, they would be well advised to park up the ploughs early and further reduce sowings for the 2016 harvest.
Mr Dunne said, “Growers will be settling up their accounts over the coming weeks. Many farmers will be in for a major shock when they realise that despite good yields grain returns at current prices will leave little or no income. Once again many they will be forced to cross subsidise grain production from their reduced basic / greening payment or other enterprises. Even the most committed of growers are asking whether there is a long term future in grain given the relentless price cost squeeze and low returns. There is no future for any industry that is not capable of generating enough income that allows for continual reinvestment.”
“There needs to be a serious realignment of the arable cost base particularly for fertiliser, machinery and machinery spares. The EU Commission and political establishment needs to take immediate action to curb the power of major input suppliers such as fertiliser and machinery manufacturers. The consolidation of these industries over recent years has created a serious imbalance. This is clearly evident from the fertiliser market where prices have increased by close on 250% over the last decade while grain prices have remained static. It now takes 2.5t of grain to purchase 1t of CAN. Historically the price ratio was 1:1 or less. The respective EU DGs (Competition, Agriculture, Trade and Growth) need to be more proactive in dealing with the major multinationals otherwise Europe and European agriculture will be the big losers,”