Ulster Farmers’ Union, seeds and cereals chairman, Allan Chambers, has stressed that with conacre agreements now being negotiated cereal growers need to look at their budgets carefully before deciding how much to pay landowners.
“Currently it costs around £360 an acre to grow and harvest a crop of spring barley. With the grain worth £135 a tonne and only £60 an acre for a good crop of straw, most growers will struggle for profitability, even with an above average yield of 2.2 tonnes an acre,” said Mr Chambers.
He said the world is massively over-supplied with all grains, with no signs that the market will deliver a better price in the short term. On that basis farmers need to look carefully at any land they are considering. It’s vital they assess its yield potential before agreeing a price,” said Mr Chambers.
“If a grower is confident of a high yield, it may be worthwhile making an offer based on a percentage of the value of a ton of barley in September 2017. This could take a degree of volatility away from the risk-taking cereal grower,” he said, adding that conacre land prices need to leave farmers with a potential to make a profit.
“Work for work’s sake may be good for mind and body, but there has to be a bottom line in the black as a reward for the effort,” said Mr Chambers.