Tuesday 09 October 2012
The grain trade
A dramatic fall in the number of tillage growers who will forward sell grain next year looks likely if the results of a Farming Independent survey hold true.
Forty percent of the 105 tillage growers surveyed at the Ploughing Championships in New Ross last week said they had forward sold grain this year.
However, just 26pc said they would forward sell grain for next year's harvest.
Fifty-two percent said they would not, while 22pc were unsure.
Some tillage farmers have been left nursing serious losses as a result of forward selling grain this year.
The unexpected price gains due to the US drought resulted in growers who had forward sold at €150-155/t earlier in the year losing out to the tune of around €60/t when prices at harvest came in at €205-215/t.
Indeed, with grain supplies down and demand up due to the weather, some growers who sold at harvest have secured bonuses of €10-15/t for supplies.
The poor yields this year meant the total tonnage of the Irish harvest dropped from an expected 2.5m tonnes to 1.8m tonnes.
Growers who forward sold grain could face further losses due to the poor quality of this year's harvest.
A particular quality specification is set out in forward contracts.
In the case of winter wheat that was 72kph in many instances but the kph levels of crops rarely got above the high-60s.
Further penalties are expected to be levied on growers as a consequence.
Commenting on the survey's findings in relation to farmers' attitudes to forward selling grain, Farming Independent columnist and Kildare tillage farmer Helen Harris said she wasn't surprised.
"The survey bears out what's happening on the ground," Ms Harris said.
- Declan O'Brien
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