Grain prices for next harvest are not sufficient to counter the huge increase in production costs for 2022.

While it is impossible to know where grain prices will settle next harvest, as of now production costs have increased by more than grain prices.

Production costs for 2022 look to be up €55-€65/t depending on the crop. Most of this comes from fertiliser – roughly €45 to €55/t depending on the crop and when fertiliser was purchased. And the fertiliser prices used here are much lower than they are today.

Growers are also likely to see price increases for chemicals, parts, electricity, fees, labour and all operations requiring diesel. These costs are difficult to pin down but look likely to add at least €5/t each.

Diesel cost is also uncertain. While volatility may stabilise, availability remains a major concern. Not having sufficient diesel to save and dry the harvest would spell disaster. At a guess, diesel and lubricants could add at least another €5/t to costs – more if harvest weather is poor.

Price

Grain price is equally uncertain. While prices of €390/t to €420/t make the news, these were for dry wheat and barley out of store. These have eased back and dry prices for harvest are hovering around €300/t to €310/t. These equate to green prices of around €265/t and €275/t for barley and wheat respectively. While these are up around €55/t, they could rise or fall due to harvest pressure.

With drying and weight loss charges likely to be up at least €5/t, total costs look set to rise by at least €60/t to €70/t. So as things stand, costs are higher than grain value and margins will suffer by at least €10/t unless prices rise further.