DESPITE HIGH wheat and sugar yields this year, few arable farmers are smiling. Prices are just too low at 95/t (66/t) for wheat. Yet prices for other raw materials such as steel and energy have never been higher, despite a low dollar. When will we see the promised turnaround in our commodity prices?

As energy prices increase, the production of renewable energies has found new momentum. Now, it seems every modern farmer must think of investing in biodiesel, bioethanol or windmills in Germany. It is amazing what kind of risks farmers are prepared to take as long as subsidies for these new technologies are given freely.

For some farmers biodiesel production is a profitable way to diversify on the farm as well as providing plenty of work 365 days a year. But if you have to pay a worker for holidays and overtime on a 40 hour week basis then there is little money to be made at current prices. So I keep myself informed but remain very reluctant to invest.

In the next few days I expect the cheque from Brussels, which will be the last one in its present form, where the premiums are coupled to production. Next year’s payment will solely be paid for land ownership.

For tenant farmers it works like an entry fee to farm. While in the Ukraine you can produce a whole crop of wheat for 300/ha (210/ha), here in Germany you have to pay this fee/rent of approx 200-300/ha (even on bad land) to be allowed to start cropping. This can neither be efficient nor competitive.

Let’s hope that energy prices in Europe climb quick enough, so we don’t need subsidies in the future. At least energy is something we desperately need in Europe. And surely in 20 years time it will be as easy to run a biodiesel production unit as it is to drive a combine today.