Tillage heartlands under threat from rent hikes and dairy

TIGHTENING margins could push tillage growers out of traditional heartlands where they are being forced to pay above the odds to lease ground, it has been warned.

Professor Jimmy Burke of UCD predicted there would be casualties as advisors warn low grain prices and increased competition for land from dairy farmers is ratcheting up the pressure on cereal growers.

With grain prices this year expected to come in at around €140-150/ac, and the required yields to cover costs ranging from 7 t/ha for spring barley to 9t/ha for winter wheat and barley, Prof Burke said smaller growers lacked the scale and earning power to survive.

Prices for rental land this year generally ranged from €200/ac to €240/ac which was beyond the limit of what most tillage farmers could justify.

“Smaller tillage guys are already exiting, and this rate of attrition will accelerate as competition for land intensifies,” Prof Burke predicted.

He pointed out that increased crop yields had maintained the total output from the tillage sector over the last 20 years despite a drop in the area planted.

However, Prof Burke cautioned that improved technology and crop husbandry would not be able to underpin national grain output indefinitely.

Tipperary-based cereals advisor PJ Phelan agreed that the long-term viability of medium-sized grain growers was being called into question by low prices, high rents and what he described as imported feedstuff produced to inferior standards than those that apply in Europe.

He said this was particularly the case in areas of the country such as north Tipperary that had a high concentration of expanding dairy farmers.

Mr Phelan said growers who lost land in such areas could not afford to replace it as dairy farmers snapped up anything that came on the market.

Rental

Nenagh auctioneer Eoin Dillon agreed that any ‘new’ land that was available to rent was invariably taken by dairy farmers.

But he pointed out that the majority of the commercial tillage farmers in north Tipperary, those growing around 500ac or over, were not interested in taking on extra land this year.

Pat Ryan of Liffey Mills said the continuing weak grain price, and the consequent tight margins, meant that a route into cereals for young growers was effectively shut.

“There was a time when you could lease a block of ground, and then beg or borrow a tractor and machinery to sow a crop and you were up and running. That day is gone,” he said.

Mr Phelan maintained that high straw prices would help support returns this harvest but he said grain prices would have to hit around €180/t for growers to make a decent return.

Teagasc’s Prof Gerry Boyle has warned there are grain stocks internationally which would impact on any potential gain from a weather event.