Grain prices have taken a slide and feed wheat hit a low of just over £100/t ex-farm earlier in the autumn.
We asked four independent agronomists how they would attempt to grow wheat economically at this lowly price point for the coming season and beyond.
Get ready to go for broke
In all honesty, if wheat is trading at £100/t, there is only one viable option – go for broke.
By and large, an individual unit’s overhead costs will be fairly constant regardless of yield, therefore the overhead cost per tonne will fall as the yield rises.
First and foremost, get the basics of soil structure and background soil nutrient status (pH, phosphate and potash) right. When choosing varieties, those which work out best on any grower’s farm might not be those top of the HGCA ranking. Instead they will be the ones that have proved to be more suited to the particular area and management practices.
Weed competition must be eliminated as soon as practical and the programme will obviously depend upon the particular challenges of any one field. Next on the agenda is plant nutrition.
The crop will require adequate phosphate for root development, the feeder system for other essential nutrients and sufficient potash to create a healthy stem and leaf structure. However, nitrogen is the driver for yield. Previous cropping and nitrate vulnerable zone (NVZ) restrictions will probably dictate the total amount applied, however a constant supply is vital.
Suggesting endless top dressings will probably not endear me to many. So another option, which has shown useful responses, is applying most of the nitrogen early on in conjunction with a nitrification inhibitor. This should not be considered if the main source of nitrogen is in nitrate form.
The temporary acidification will assist with uptake of trace elements. Growth regulation in balance with nutrition goes without saying.
Having got this far, ensuring optimum photosynthesis is critical, so a robust fungicide programme is the order of the day. Chlorothalonil, as often and as much as is permitted, along with a mix of protective and curative active ingredients applied at critical timings, will provide the backbone of the programme.
So what’s new, I hear you say. Not a lot, I suppose. One input I have been unable to source on the internet or anywhere else is a dollop of good luck.
Science holds the answer
To grow a tonne of wheat for £100 is a very tall order.
Figures from a local HGCA monitor farm in the South West indicate current costs of about £120/t based on a yield of 10t/ha. To make that figure £100/t would require a yield increase to 12t/ha, with no fall in costs, or a drop in costs of £200/ha with no fall in yield.
These are not trifling figures. Simply paring so-called variable costs is not possible without reducing production, assuming you are currently buying and utilising all inputs efficiently.
Yield mapping on the same monitor farm this season shows areas achieving more than 16t/ha. It is safe to assume that yield wasn’t limited by inputs in 2014.
The greatest obstacle to growing wheat for £100/t in a well-managed system is the one over which we have least control – the inherent quality of the soil. We can take out compaction, supply nutrients and correct pH, but if the soil does not have an adequate available water capacity then, without irrigation or perfect spring and summer rainfall, there is an absolute limit to yield.
Men in white coats
I believe the answer to growing wheat for £100/t lies in the hands of scientists. If plant breeders could break the link between effective septoria resistances and yield, then substantial savings in fungicide costs could be achieved.
Disease control costs are close to 1t/ha of grain. With current genetics and fungicides, an accurate disease forecasting mechanism could make large improvements in margin over fungicide costs. I wonder if the next-generation Meteorological Office supercomputer could be harnessed into a powerful disease-forecasting model?
“Grow more hectares to spread fixed costs” is an oft-recited mantra. Current land prices make justifying purchase against margin/ha difficult. Short-term rental prices are inflated, but market economics means that those rents are not sustainable. A variable rent based on grain prices is one way of ensuring that all the risk isn’t the tenants’.
Depressing reading. But short of winning the lottery and buying a deep, fertile, blackgrass-free block of land where rainfall and sunshine happen in the right amounts, at the right time, this is the reality.
Good muck and judgement
Can we grow wheat at £100/t? The easiest way of meeting this conundrum is growing over 12t/ha. However, for many that level of average yield is a pipe dream.
Blackgrass infestations, high rents, indifferent soils and the trump card of weather conspire to keep our highest yield potential under lock and key. So how do you grow a crop and make money at low prices?
The soil has to be cared for and compaction is a serious yield robber. Manage vehicle movements and cultivations – recreational passes cost you £50/ha. Establishment will be with direct drilling and rotational ploughing, after 20 September.
Where there’s muck…
Can you easily obtain manures or digestate? These sources of nutrients and organic matter are cheap and cost effective.
Nitrogen applications need to be linked to the price/kg, so if we assume this is 70p/kg we need 7kg of grain to cover 1kg nitrogen, which is the breakeven ratio (BER). On sandy clay loam, the response to nitrogen is linear up to approximately 125kg.
After that, the response curve starts to level off at 200kg, then the BER of 7:1 is reached – and then you have the right mix of investment and return. The application of nitrogen should then be split, firstly in mid-March with sulphur and the remainder in late April.
This strategy, along with later drilling, reduces luxury growth, decreases disease pressure and opens up more cost-effective fungicide programmes. I still believe that this will require a minimum of three fungicides, with protection the name of the game.
Chlorothalonil will be a mainstay to protect leaf layers. Bad disease years will still see the most modern chemistry required and the key is flexibility to change plans as the season unfolds.
Disease resistant varieties will allow this, but plant resistance is an additive, not a cure to the use of fungicides, and should be treated as such.
After all of this, you might decide a three-year grass ley followed by wheat would answer all your problems. It certainly would produce a cheap wheat crop; unfortunately you need to make the grass pay. Ideas please?
Profits are in time, steel and rubber
I was asked for my thoughts on “producing wheat at £100/t”. So, being a contrary creature I would like to change the scope of discussion to “producing wheat at £120/t” because I believe this is a more realistic price for harvest 2015.
We can deliberate variable costs such as fertiliser and chemicals, but ironically the biggest changes in cost of production come from reducing fixed costs. This doesn’t mean that we all become direct drillers, but it does hint the biggest impact on farm profits may come from time, steel and rubber.
Prime Agriculture (Suffolk)
At Prime, our estimated variable cost of production ranges from £48-61/t, so my foot will be close to the floor encouraging clients to push yield to reduce these costs, but always looking for the best return on investment.
Product choice is important as we seek out the best efficacy and value of required active ingredients. There will also be a keen – and sometimes neurotic – emphasis on perfect application timing.
Good timing is imperative to maximise product efficacy. This is ever more important when we are relying on prevention and protective activity in resistant blackgrass situations and septoria control.
Changing our ways
I also think some obvious steps to tighten our belts have already been made inadvertently, for example where blackgrass control has become difficult and expensive. In these situations we have reduced costs by adapting the rotation to include more spring or broad-leaved crops. This may impact on the overall farm income, but sustainability is all important.
Winter and spring weather will influence spend on fungicides. The big challenge is septoria control, as I believe resistance to azoles is beginning to bite. There is no scope to let disease in, so early treatments will be robust. To reduce risk and spend, try adopting some of the newer, cleaner varieties this autumn; I am interested to see these growing commercially.
So, my letter to Santa will read something like this… Because I like happy farmers, please can I have: Better crop prices; a cold winter and early spring; easy-to-kill blackgrass; and low disease pressure – if not the strength and humour to enjoy a good challenge.