Twenty tillage farmers in the southeast carried out Teagasc Profit Monitor calculations on their farms. Their average cost of production for spring barley was €121/t and €126/t for winter wheat.
However, what surprised all the farmers who took part in the analysis was the variation of costs between the farms. The costs per tonne ranged from €100 to €177.
This begs the question, if there is such a diverse range of costs for a pool of just 20 farmers, what could the range of costs be nationally?
Bearing in mind that the costs per tonne calculated in this analysis excluded land rental, labour and credit interest, the total costs could be considerably higher in many situations.
Land rental prices in 2015 have shown no signs of easing back. In fact, they appear to have risen even higher. So have tillage farmers examined their costs carefully enough to make an informed decision about whether to take that expensive block of rented land?
Do tillage farmers know the impact that greening and crop diversification are going to have on their business?
Do tillage farmers know if forward-selling grain at a certain price is a good commercial decision for their farm?
Unless you know your own individual costs per tonne, the answer is no.
Greening and crop
diversification
Due to the new greening rules, many growers may be growing a new crop on their farm for the very first time. Many traditional spring barley growers have chosen winter barley as their second crop. Some are growing spring beans for the first time. Whatever new crops are grown, each crop has its own unique set of costs.
For example, winter barley will be in the ground for roughly 10 months of the year and will require autumn and spring treatment, whereas spring barley has a much shorter growing season and a considerably lower spend on inputs.
Unless a profit monitor is carried out for the 2015 harvest, how can tillage farmers know for sure which crop performed best? And, more importantly, did it make a profit.
Machinery costs
Big differences existed between the 20 growers analysed in 2011. Their range of machinery costs varied from as low as €163/ha (€66/acre) to €471/ha (€191/acre). Teagasc has an excellent machinery costs programme that will give a very accurate calculation for each individual tillage farm.
As they say: “If you don’t know it, you can’t measure it.”
Regardless of what system and scale of crop production you have, margins are tight. The Basic Farm Payment will reduce significantly on most tillage farms over the next five years. Attention to detail will be the key to remaining efficient as well as the monitoring of performance.
Calculating the correct costs of producing crops on your farm will be crucial to navigate through the next five years. Contact your local Teagasc adviser now to help identify your farm’s costs per tonne.
For further information read more here.
In brief
Huge variation in costs to produce a tonne of barley and wheat.Land rental prices have an impact.Big range in machinery costs.You can’t forward-sell unless you know your costs.Attention to detail vital for efficiency.
Twenty tillage farmers in the southeast carried out Teagasc Profit Monitor calculations on their farms. Their average cost of production for spring barley was €121/t and €126/t for winter wheat.
However, what surprised all the farmers who took part in the analysis was the variation of costs between the farms. The costs per tonne ranged from €100 to €177.
This begs the question, if there is such a diverse range of costs for a pool of just 20 farmers, what could the range of costs be nationally?
Bearing in mind that the costs per tonne calculated in this analysis excluded land rental, labour and credit interest, the total costs could be considerably higher in many situations.
Land rental prices in 2015 have shown no signs of easing back. In fact, they appear to have risen even higher. So have tillage farmers examined their costs carefully enough to make an informed decision about whether to take that expensive block of rented land?
Do tillage farmers know the impact that greening and crop diversification are going to have on their business?
Do tillage farmers know if forward-selling grain at a certain price is a good commercial decision for their farm?
Unless you know your own individual costs per tonne, the answer is no.
Greening and crop
diversification
Due to the new greening rules, many growers may be growing a new crop on their farm for the very first time. Many traditional spring barley growers have chosen winter barley as their second crop. Some are growing spring beans for the first time. Whatever new crops are grown, each crop has its own unique set of costs.
For example, winter barley will be in the ground for roughly 10 months of the year and will require autumn and spring treatment, whereas spring barley has a much shorter growing season and a considerably lower spend on inputs.
Unless a profit monitor is carried out for the 2015 harvest, how can tillage farmers know for sure which crop performed best? And, more importantly, did it make a profit.
Machinery costs
Big differences existed between the 20 growers analysed in 2011. Their range of machinery costs varied from as low as €163/ha (€66/acre) to €471/ha (€191/acre). Teagasc has an excellent machinery costs programme that will give a very accurate calculation for each individual tillage farm.
As they say: “If you don’t know it, you can’t measure it.”
Regardless of what system and scale of crop production you have, margins are tight. The Basic Farm Payment will reduce significantly on most tillage farms over the next five years. Attention to detail will be the key to remaining efficient as well as the monitoring of performance.
Calculating the correct costs of producing crops on your farm will be crucial to navigate through the next five years. Contact your local Teagasc adviser now to help identify your farm’s costs per tonne.
For further information read more here.
In brief
Huge variation in costs to produce a tonne of barley and wheat.Land rental prices have an impact.Big range in machinery costs.You can’t forward-sell unless you know your costs.Attention to detail vital for efficiency. 
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