By now, the world and its mother knows that fertiliser prices have gone through the roof and they will put a significant strain on crop and farm margins.
Higher costs also pose a threat to farm viability and fertiliser will not be the only input that will see price increases.
Decisions must be made at grower and field level on the crop mix for spring planting whilst watching financial exposure.
Fertiliser alone could add €160/ac to spring barley cost and that would mean an additional €40,000 spend on a 100ha farm.
In the past, merchants and suppliers carried a lot of the input credit needed but this seems unlikely this year. This too should be a factor in deciding on a workable crop mix to help decrease overall farm expenditure. Look at the differences in total variable costs in Table 1.
So far, it seems that the prices on offer for malting barley from Boortmalt and other merchants will encourage farmers to follow that crop, given that it looks to have a €70/t premium over feed at the moment. A mix of alternative crops is still preferable, given the risk of not achieving the required specs.
While there are many things that alter crop choice, potential for margin must be one of them. This requires that you take account of different input costs and income potential and the Teagasc Crop Costs and Returns publication has long provided this useful service.
Uncertainty over a range of costs, especially fertiliser, has delayed that publication until spring this year. The 2022 costs attempt to cater for the higher costs and altered fertiliser use, especially nitrogen. Adjustment to the N rate was less for malting barley as its price premium depends on being able to deliver the crop within designated protein ranges.
For the cereal crops, average cost increase is about 37% on 2021 – winter crops are higher and spring crops are lower. The biggest proportion of the cost increase is coming through higher fertiliser prices despite some rate reduction. There are also increases for interest and machinery.
Weather is a huge risk factor, especially at harvest, as it can significantly alter overall farm costs and returns.
Table 1 only includes combinable crops but the Teagasc booklet also includes costs and margins for fodder crops and potatoes.
Margin comparisons
The margin predictions for 2022 versus 2021 are not directly comparable because prices are different and reduced nitrogen usage may affect yield. For 2021 predictions, prices finished up much higher than the estimates and the prices used for 2022 are actually lower than those achieved in 2021.
Looking at individual spring crops, a 7t/ha crop of feeding barley would leave a margin of €279/ha, while 7.5t would be €379. The same sized crops of malting barley (valued at €230/t on average) would leave €504/ha and €619/ha but this would increase to €714/ha or €844/ha if the average price was €260/t. Spring oat margins are quite comparable to feed barley but they use less nitrogen.
A four- or five-tonne crop of peas looks good by comparison to the feed grains as they have no nitrogen requirement. Spring beans also look relatively good for those who can average 5.5t/ha or more. For both crops, the protein aid could be lower if the total area exceeds 12,000ha.
The winter oilseed rape margin is based on the same fertiliser usage as last year but most crops may require very little spring N and much lower total rates which should improve crop margin considerably, especially if good yields are produced and locked into a price above €500/t for harvest.
It is also worth noting that a 3t/ha crop of spring rape looks equivalent to just under 8t/ha of spring barley.
Teagasc Crop Costs and Returns indicate a 37% increase in production costs for 2022.Most, but not all, of this comes from higher fertiliser prices. Malting barley stands out for margin based on recent price offers but pulse crops can help to reduce overall farm expenditure.Winter oilseed rape is potentially the standout crop this year where the required N rate to be applied is low and the price high.
By now, the world and its mother knows that fertiliser prices have gone through the roof and they will put a significant strain on crop and farm margins.
Higher costs also pose a threat to farm viability and fertiliser will not be the only input that will see price increases.
Decisions must be made at grower and field level on the crop mix for spring planting whilst watching financial exposure.
Fertiliser alone could add €160/ac to spring barley cost and that would mean an additional €40,000 spend on a 100ha farm.
In the past, merchants and suppliers carried a lot of the input credit needed but this seems unlikely this year. This too should be a factor in deciding on a workable crop mix to help decrease overall farm expenditure. Look at the differences in total variable costs in Table 1.
So far, it seems that the prices on offer for malting barley from Boortmalt and other merchants will encourage farmers to follow that crop, given that it looks to have a €70/t premium over feed at the moment. A mix of alternative crops is still preferable, given the risk of not achieving the required specs.
While there are many things that alter crop choice, potential for margin must be one of them. This requires that you take account of different input costs and income potential and the Teagasc Crop Costs and Returns publication has long provided this useful service.
Uncertainty over a range of costs, especially fertiliser, has delayed that publication until spring this year. The 2022 costs attempt to cater for the higher costs and altered fertiliser use, especially nitrogen. Adjustment to the N rate was less for malting barley as its price premium depends on being able to deliver the crop within designated protein ranges.
For the cereal crops, average cost increase is about 37% on 2021 – winter crops are higher and spring crops are lower. The biggest proportion of the cost increase is coming through higher fertiliser prices despite some rate reduction. There are also increases for interest and machinery.
Weather is a huge risk factor, especially at harvest, as it can significantly alter overall farm costs and returns.
Table 1 only includes combinable crops but the Teagasc booklet also includes costs and margins for fodder crops and potatoes.
Margin comparisons
The margin predictions for 2022 versus 2021 are not directly comparable because prices are different and reduced nitrogen usage may affect yield. For 2021 predictions, prices finished up much higher than the estimates and the prices used for 2022 are actually lower than those achieved in 2021.
Looking at individual spring crops, a 7t/ha crop of feeding barley would leave a margin of €279/ha, while 7.5t would be €379. The same sized crops of malting barley (valued at €230/t on average) would leave €504/ha and €619/ha but this would increase to €714/ha or €844/ha if the average price was €260/t. Spring oat margins are quite comparable to feed barley but they use less nitrogen.
A four- or five-tonne crop of peas looks good by comparison to the feed grains as they have no nitrogen requirement. Spring beans also look relatively good for those who can average 5.5t/ha or more. For both crops, the protein aid could be lower if the total area exceeds 12,000ha.
The winter oilseed rape margin is based on the same fertiliser usage as last year but most crops may require very little spring N and much lower total rates which should improve crop margin considerably, especially if good yields are produced and locked into a price above €500/t for harvest.
It is also worth noting that a 3t/ha crop of spring rape looks equivalent to just under 8t/ha of spring barley.
Teagasc Crop Costs and Returns indicate a 37% increase in production costs for 2022.Most, but not all, of this comes from higher fertiliser prices. Malting barley stands out for margin based on recent price offers but pulse crops can help to reduce overall farm expenditure.Winter oilseed rape is potentially the standout crop this year where the required N rate to be applied is low and the price high. 
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