A farm benchmarking process has thrown up some good news for Scottish arable farmers.
AHDB, the levy board which represents many sectors of the industry, has released its Farmbench data to review the 2022 arable year taking data from its farm comparison tool which is used in around 100 businesses across Scotland to compare their production costs and margins.
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The results show 2022 as a good gvrowing season, with high prices and low drying costs leading to positive margins across much of the sector.
Spring barley – the country's largest single grain crops – was a big success story with good prices leaving the best margin in some years.
The crop established well this spring, particularly fields which were drilled before the weather broke in late March and April. Conversations with the benchmarking groups showed that fields sown by mid-March yielded best whilst fields not sown until mid-April playing catchup through the growing season.
The disease burden for spring barley, as with most other crops, benefited from the long dry summer keeping disease friendly damp conditions to a minimum. Despite fewer disease outbreaks farmers still maintained robust plant protection programmes as high crop prices focused minds on maximising yields with spray costs appearing value.
Evidence of this can be seen in the benchmark figures which show that the best 25% of businesses spent £35/ha on herbicides, compared to £45/ha in the bottom quarter. Fungicide costs were more even with around £50/ha spent on most farms.
There was some discussion in the AHDB group chat about reducing inorganic nitrogen, phosphates and potash on fields. But the best performing farms put on more fertiliser.
The top 25% of spring barley growers applied an average of 120kg/ha costing £276/ha compared to the bottom 25% who put on only 109kg/ha at accost of £246/ha.
Julie Clark, of AHDB, commented: “In the discussion groups, we saw a range of between 15kg to 25kg per ha drop in fertiliser for some farms in the spring crops. However, in cash crops – like wheat and oilseed rape – we saw little drop in fertiliser due to the high market returns on offer.”
Malting barley prices for farmers this year averaged £280/t for most growers but some who sold forward at harvest 2021 would have been paid closer to £180/t.
The average gross margin for the top 25% was £1978/ha compared to £1282 for the bottom 25%. Full economic net margin, including all overheads, for spring barley was £1118 on the average farm.
Looking ahead to 2023 the cost of production per tonne was estimated to rise by £40/t to cover rising costs which puts the required market price over £200. Discussions between farmers threw up the idea that farmers offered £240/t for harvest 2023 on fields yielding 10t/ha should take it. This was even taking into account a cost of inorganic fertiliser of £800/t.
Ms Clark said: “We have seen some change to potash and phosphorus application with some farmers taking a ‘holiday’. Others have been buying hen manure, farmyard manure and digestate if it is nearby.
"Digestate has been working best for farmers who have the scale, labour and time to spend on it. We have also discussed with the groups the benefits of chopping straw to soil health, compared to selling for £80/t with perhaps more people turning the chopper on.”
Winter barley was not as exciting a crop this year with less lucrative margins than spring barley. However, most farmers were willing to accept lower margins as it gave a chance for early entry for oilseed rape.
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Ms Clark said: “Some places make a good job out of winter barley whilst other struggle. The only consistent with the better performers is the soil type and health. There is not much to differentiate the crops with inputs and timing of sprays.”
Wheat
Scotland didn’t suffer the extreme heat as England and the winter wheat yields held up well.
Prices look to have ranged between £277/t for the top 25% of growers down to £236/t for the bottom 25%. Within the discussion groups some farmers sold loads at £180/t whilst others topped out at £360/t.
Interestingly, the fertiliser application only ranged from 197kg/ha for the best producer to 204kg/ha for the poorest. But, the poorest 25% bought their fertiliser cheaper at £269/ha compared to the middle 50% who spent £297/ha.
Organic fertiliser purchases showed that poorer performers paid £23/ha whilst the best 25% paid only £2/ha. Herbicide costs were flat across the board at an average of around £40/ha to £45/ha.
Meanwhile, the better farmers paid £138/ha on fungicides, compared to £121/ha on the bottom 25%. Overall, the top performers had a gross margin of £2426/ha and full economic net marking of £1913 nearly double the bottom 25% at £1003.
Oilseed rape
Ms Clark said: “In recent years there has either been bumper yields and poor prices or good prices but weak yields. However, this year we seem to have hit the sweet spot. Plenty of farmers have been getting over £600/t for their crop.”
The success of this year OSR was highlighted by the benchmark figures for the top 25% of growers who declared a gross margin of £2724/ha with the bottom 25% getting £1777/ha.
The full economic net margin was calculated at £2153/ha for the top performers and £1191/ha for the poorest. The strong performance is pushing some to increase the area of oilseed rape in their rotation but few will plant more regularly than one in five or one in six.
Ms Clark said: “The best crops were again established early with the optimum time mid-august. Some farms cut back on fungicides, but it cost them in yield. The strong prices though, masked the poorer performers as even poor crops left a margin.
Looking ahead for cereals in 2023, inputs are expected to rise by 32% which compares to the cost rise of 15% for the harvest past. But despite this, if the price of cereals remains at current levels there is profitability to be had.
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