TOP QUALITY milling wheat should net growers a healthy profit of £120/ha in 2005, according to grain trader Gleadell.

That was the income forecast after fixed costs of £300/ha and variable costs of £260/ha, said Gleadell‘s retail and malting barley director, Stuart Shand.

But farmers who sowed winter malting barley or oilseed rape would lose an estimated £14/ha and £37/ha respectively because strong world supply has weighed on prices.

Production in the coming year was also expected to be strong, he told journalists at the Farmers Club, London on Monday (Jan 31).

Mr Shand also predicted that Group 2 wheat would make £93/ha, marrowfat peas £47/ha, spring malting barley £20/ha and feed wheat just £8/ha.

He pointed out that the figures were indicative and would not be seen at every farm, but added that they made good average values.

He worked on current futures prices for the various crops at harvest.

“When farmers first planted winter oilseed rape, they were looking at £160/t, but rape has plummeted in the last few months,” he said.

“They should have made sure they were covered by forward selling, but most have let it run.”

Mr Shand also warned that farmers had to cut down their fixed costs, otherwise set-aside requirements under the single farm payment could prove costly.

A grower with fixed costs of £300/ha would lose £335/ha on set-aside, which could outweigh the advantages of registering for the SFP, he added.

NET Income Harvest 2005

 

Winter
Group 1
Milling

Winter
Group 2
Milling

Peas
M‘fat

Spring
Malting
Barley

Winter
1st Feed Wheat

Winter
Malting Barley

Winter Rape*

Set-aside

Projected
harvest price/t

£80

£75

£135

£82

£62

£80

£135

£0

Projected yield/ha

8.5

8.7

4.2

6.1

9

6.7

3.8

0

Crop output/ha

£680

£653

£567

£500

£558

£536

£513

£0

Variable cost/ha

£260

£260

£220

£180

£250

£250

£250

£35

Gross margin/ha

£420

£393

£347

£320

£308

£286

£263

(£35)

Fixed costs

£300

£300

£300

£300

£300

£300

£300

£300

Net income

£120

£93

£47

£20

£8

(£14)

(£37)

(£335)

* Including Oil Bonus
Note: Maximum single farm payment for 2005 estimated at £256/ha