50% set-aside a better bet than winter wheat?
By FW Staff
FIFTY per cent set-aside could be more profitable and less risky than winter wheat on low-yielding land. At current cereal prices it is a realistic option for some growers this season, say advisors.
“On land yielding about 6.2t/ha (2.5t/acre) of winter wheat, the gross margin would typically be around £530/ha (£214/acre),” says Rachel Potter, farming consultant with Strutt & Parker.
Take off a further £230/ha (£93/acre) for cultivation costs and the margin falls to £300/ha (£121/acre). An allowance must also be made for interest on working capital. This compares with a £306/ha (£124/acre) payment for set-aside and its minimal associated costs of either mowing or a glyphosate spray.
Fixed costs can be cut as a direct result of increased set-aside, for example where contractors are used for much of the work.
Some Scottish growers struggling to gather late wet crops may be forced to contemplate increasing set-aside area. But at Bidwells Perth office, Jim Donald says growers initial reaction to the option was cool – they preferred to farm the land.
But there might be a place for set-aside on poorly-equipped farms with marginal land or for those approaching retirement, he says.