Big potential to reduce bills ahead of spring planting work and silage
We all need a silver lining at the moment and in machinery circles, with so much spring planting still to do, there is one clear upside materialising. Sustained falls in the price of oil as a result of the row between Russia and Saudi Arabia, and plummeting world demand due to the Covid pandemic, are filtering through to pump prices.
At time of writing, the price of a barrel of US Crude is $30 and continuing to fall. Oil prices have a huge impact on everyday farming life, exerting influence over key inputs like diesel, fertiliser and silage bale wrap.
I contacted a few agri diesel merchants around the country to find out what’s happening on green diesel. Prices seem to be tumbling over the last week and, at time of writing, the lowest prices seem to be around the 55-60 cents/litre mark including VAT. This means the cost of green diesel is effectively down almost 20 cents/litre since the start of the year, when prices were around 75 cents/litre. The drop equates to a saving of €200 on a 1,000-litre delivery.
This means that a farmer ordering 1,000L of diesel today will pay €550€600 including VAT. At the start of the year, agri diesel was priced at €750 per thousand litres, including VAT. Based on the figures in the table (below right), comparing prices over this short time period, the potential is there to nicely reduce your fuel bill as we head into the part of the year where engines truly get going with spring planting work and silage.
The news on falling fuel prices will also be welcome to contractors, who really need to keep an eye on cash flow in light of the likely downturn we are heading into this summer.
Silage is the big killer for diesel bills because it’s such a powerhungry job. Even a modestly sized contracting outfit can very quickly run up a fuel bill of €2,500 per day. A high output 10-acres-per-hour mowing combination will burn almost two litres of diesel per acre, while combination balers are now also burning close to two litres of diesel per acre.
Larger self-propelled silage harvesters are burning in the region of 10-12 litres per acre.
Of course, farmers will expect to see lower fuel prices reflected in contractor charges being quoted now that diesel prices have tumbled. Already the FCI contractor charge list looks out of date given that it was based on a fuel price of 70 cents per litre.
Things have changed so much in a short space of time.
How do you go about keeping tabs on your fuel costs? It is worthwhile having an idea about the fuel requirements for some of the more power-hungry jobs like ploughing and power harrowing.
Did you know that ploughing with a four-furrow reversible plough, for example, tends to use, on average, 23 litres of diesel per hectare ploughed depending on the soil type? At current fuel prices, this comes to a fuel cost per hectare ploughed of €11.73. At the start of the year, the fuel cost of the same job per hectare was €17.25.
Equally hard on the pocket is subsoiling, a job that many farmers do to relieve compaction caused either by poaching or machinery damage last backend.
Subsoiling uses up about 18 litres of diesel per hectare worked, which is about €9 at current diesel prices compared to €13.50 at the start of the year.
If these figures are coming as a surprise to you (see the table for fuel use for other common spring tasks), turn it to your advantage by tightening up on fuel costs.
The beginning of spring is a good time to take stock of what your real fuel costs are and to plan to reduce unnecessary fuel use. Some of the variables that have the most considerable effect on fuel consumption are also the easiest to manage.
For example, tyre selection and pressure selection is directly linked to excessive fuel consumption. Unnecessary use of counterweights is another fuel drain.
And correct tractor and tillage system selection are two other ways of managing fuel use.
Easy variables to get right:
Correct tractor and tillage system selection are two ways to manage fuel consumption