Planning for straw supply and demand will be more important than ever this year, as farmers are expected to have to declare if and what area of straw they intend to chop when applying for their basic payment.
It is no longer as simple as turning on the chopper when you discover that demand and prices are low and buyers can no longer wait for prices to settle.
Farmers will need to have some idea of the straw their regular customers will need ahead of the BPS deadline, so both livestock and tillage farmers should commit to some form of numbers or acres by May.
The result may be a forward price being agreed to ensure supply.
At an expected payment of €250/ha, it’s unclear how many tillage farmers will be enticed to provide a carbon store in their soil. In order to see people avail of the scheme, it must pay more than the average return from straw.
One thing is for sure – dealing in straw is not cheap. Likewise, in order to secure straw, livestock farmers or compost producers must place a fair value on the commodity.
The cost of making a bale
The table below describes some of the costs involved in making a bale of straw and use an average cereal straw yield of 23 (4X4) round bales per hectare (nine bales per acre).
The Association of Farm and Forestry Contractors in Ireland (FCI) now lists baling costs for round 4X4s at €5/bale (excluding VAT).
In reality, most farmers can get baling done for about €4/bale (including VAT). If turning is needed after wet conditions, €12/ha can be added on for one turn.
Handling is estimated at €1/bale, so if straw is loaded in the field, into a shed, out of a shed and off-loaded again, that comes to €4/bale.
Fixed costs for storage fit in the middle of these movements and vary between farms. The FCI estimates transport costs at about €66/hour.
If you decide to chop, you add approximately €15/ha (€6/ac) on to harvesting costs. You may also incorporate with a run of a cultivator, but this would likely happen either way.
Value of straw to soil
Straw can have an extremely positive effect on soil health and structure, but it’s extremely difficult to quantify.
This benefit, combined with reduced compaction from baling, turning, loading, drawing and speed of turnaround to the next crop, is perhaps priceless. This reduction in workload also reduces emissions to the atmosphere.
Phosphorus and potassium bills add up when offtakes are constantly being replaced with bagged fertiliser, so returning straw to the soil can help to decrease these costs, albeit slowly, particularly where soil biological activity is low.
Carbon markets are part of farming’s future and with a potential to supply 500kg/ha of carbon and a payment of €30/t available, building soil carbon can become more attractive, aside from the build-up of organic matter and improved soil structure.
This will no doubt entice farmers to build soil carbon into the future and let’s not forget this carbon store is offsetting emissions mainly coming from the livestock sector of agriculture.
Advantages of chopping straw
Supply and demand
As with all commodities, supply and demand affects straw price. In recent years, straw shortages have been seen in years of drought and prices have gone out of control in some cases, but hopefully the shortage has helped to place a value on straw.
The cereal area has seen a decline of 232,822ha between 1980 and 2019. In that time approximately 5m bales have been lost from the market.
Tillage farmers are struggling to justify paying high prices for land, as they compete with the dairy sector for acres.
Supports for the tillage sector have also been thin on the ground and with this decrease in land, farmers must understand the reduction in straw availability and must be willing to pay for the commodity or the reality is there will be a further reduction in tillage area and a further reduction in straw supply without ever turning on the chopper.
Recent reaction to the straw incorporation scheme from some livestock farmers needs to be put into perspective. Aside from a reduction in tillage area, weather is still the most likely factor to affect straw yield and availability and if a fair price is there for straw farmers will be slow to turn on the chopper.
Lets put things into context, if this scheme resulted in an increase in price of €5/bale (which is high and unlikely), a dairy farmer with 100 cows using 50 bales of straw would see their total straw bill rise by €250 and in the meantime their carbon emissions are being offset by tillage land. In a sense, it’s a carbon credit.
If the straw is needed and wanted, a floor is needed in the market to allow farmers to develop a consistent and sustainable price to ensure there is Irish straw in the future.