After two excellent harvests in 2021 and 2022 where yields were above average and grain price increased to unprecedented levels we now look forward to planning for 2023. Costs did increase in 2022 particularly fertiliser but many tillage farmers avoided the worst of these as a lot of business was done in the early part of the spring before the spike in prices came in March/April.
But what of 2023? Everybody is starting at the same point with expensive fertiliser while seed, chemicals and machinery costs have all increased substantially over 2022.
The Teagasc costs and returns book is published every January and outlines the expected costs and returns for tillage crops based on current input costs and the grain price on offer.
The provisional costs for 2023 indicate that fertiliser will be at its highest point in the 45 year history of the publication with CAN+S at €860 and 10-10-20 included at €975 in the costings. Cereal seed is up €130/t, machinery +5% and chemicals +10% on 2022.
The provisional costs and returns for 2023 show that the cost of growing a crop of winter wheat and spring barley in 2023 has increased by 65% and 56% respectively when compared to 2021. Based on current figures a tillage farmer with winter crops can expect a 62% increase in input costs from 2021.
The equivalent figure for a tillage farmer with spring crops is a 48% increase in costs for 2023 when compared with 2021.
Having a spread of crops is crucial to reducing risk. We experience more weather extremes now than in the past and having a spread of crops helps to mitigate against this risk. Winter barley was disappointing in the south this year and it is tempting to throw all the eggs in the spring barley basket but what if we get a late wet spring? And how often has winter barley been harvested and straw baled while rain has delayed spring barley harvesting and the subsequent losses that occur.
Make cropping decisions based on the 5 year average yield for the farm rather than the previous harvest.
The biggest source of the increase in input costs is fertiliser. Make sure there is an up-to-date nutrient management plan in place for the farm so no excess fertiliser is used. Remember phosphorus cannot be spread on a tillage farm in 2023 without a soil sample result showing that it is required. Organic manures can be used to replace chemical fertiliser and were very successfully used in 2022, both ploughed in and spread in crop. 1,000 gallon of cattle slurry is worth €50 at today’s fertiliser prices. Currently protected urea is significantly cheaper than CAN and Teagasc trials show that it is equally effective once spreaders are set up correctly and tramline widths are not wider than 24m.
Many tillage farmers are reluctant to forward sell grain, understandably everybody wants to sell at the top of the market but if you are making money based on average yields for the farm at the price on offer this will reduce financial risk to the farm. As fertiliser is the biggest input cost outside of machinery and is often linked to grain price maybe selling some grain when purchasing fertiliser could be worth considering.
Beans can be very profitable in 2023 due to the increase in protein payment. Under the new CAP the funding for protein crops has increased from €3m to 7m. As a result the minimum protein payment for beans will be €350/ha and could rise to €500/ha if the targeted area of 20,000ha is not realised in 2023. As a result beans will potentially be the most profitable crop in 2023.
Aside from the profitability growing beans will reduce the fertiliser bill on the farm both for 2023 and 2024 where there is a lower nitrogen requirement for crops following beans. Some of the best crops in harvest 2022 came after beans.
The 2023 Recommended list of Winter Cereal Varieties has now been published on the Department of Agriculture website and makes for some interesting reading with some familiar varieties disappearing and some good new ones on the provisionally recommended list.
Most crops have established well with few reports of damage or germination having been affected by the drought. Weed control was applied to some crops pre-emergence while a significant of other crops have received nothing yet.
This years crops forum was a hybrid event with a live audience and an online audience who could tune in and ask questions remotely. The event was a huge success and may point to more of this type of event in years to come. The event was recorded and videos have been uploaded onto the Teagasc Crops YouTube channel where you can also access other Teagasc crops videos. The forum has been divided into three videos of each section on the day which can be viewed on the links below;
Maincrop varieties are coming to the end of the season with most crops senescing rapidly with the exception of late planted crops which are still relatively green. Recent rain while welcome will have very little impact on yield at this stage of the season although it will help to reduce bruising at harvest.