28 April 2001

Industrial impetus

Growing an industrial crop on set-aside is one way to ensure you maximise the profits in your rotation. Debbie Beaton explores the options

IF you have the manpower and machinery it makes a lot of sense to grow an industrial crop on set-aside land to produce a total gross margin – the set-aside payment and crop value – that can outstrip other breaks. And for some growers the benefit of growing oilseed rape as an entry to wheat, rather than fallow or regenerated set-aside, is reason enough.

So what are the options? There are two – high erucic oilseed rape (HEAR) and conventional oilseed rape grown for industrial uses. You need an industrial contract with a merchant to do either and the key players are Kings of Coggeshall and United Oilseeds.

First, HEAR. New contracts for the coming autumn have just been announced by Kings with a fixed price of £135/t to £145/t depending on the movement period: "Its an attractive price, compared with current spot prices for oilseed rape, and will appeal to any growers wishing to lock into a guaranteed price next harvest," says the companys Stewart Green.

The price goes some way to compensating for a yield which is between 6 and 8% lower than conventional double low varieties of oilseed rape. Last year average HEAR yields were approximately 2.7t/ha compared with 2.9t/ha for conventional rape. "But several experienced growers often exceed the national average for conventional double lows; the top 10% produced HEAR crops of 4t/ha," points out Mr Green.

He calculates that the gross margin on winter HEAR is £187/ha on top of the set-aside payment bringing a total gross margin of £383/ha. The gross margin on spring-sown HEAR, including set-aside, is about £293/ha.

Kings are offering two varieties: stalwart Martina which is a high glucosinolate variety and stiff-strawed newcomer Maplus which is low in glucosinolates. The level of glucosinolate does not affect the end use of HEAR but may influence growers who have a big pigeon problem.

Spring-sown HEAR is an option, but the area grown is relatively small says Mr Green: "We are offering contracts for spring HEAR this year but recognise that most growers prefer the higher yielding option of a winter-sown crop. The contract price this spring is £125/t for Sheila."

Graham Williams has been growing winter HEAR for the past nine years at Garlands Farm, Tollesbury in Essex. HEAR has a one in four or five-year position in a fairly atypical arable rotation which includes wheat, herbage seed, borage and echium.

"I like the fixed price element, which takes out the vagaries of one element of the market and leaves me to concentrate my attention elsewhere. It also produces a better gross margin than industrial oilseed rape and gives me a good entry for wheat," he says.

He grows HEAR on set-aside and also within the main arable regime in order to avoid complicating the rotation with conventional double low rape, since a 50m isolation distance between the crops is necessary. Mr Williams favours Maplus which yielded 1.6t/acre last year and produced a margin not far behind some of his wheats.

HEAR is not expensive to grow, says Mr Williams. His agronomy programme is straightforward: one herbicide, an autumn fungicide, nitrogen in the spring and one fungicide at flowering. "Maplus seems to be reasonably resistant to phoma and light leaf spot., but you might need an insecticide against pollen beetles some years."

Harvesting? Maplus is shorter than Martina so this season he is considering direct combining, rather than swathing. "If you are growing HEAR and conventional types in your rotation it does make harvesting and storage more awkward which is well worth bearing in mind," advises Mr Williams.

Biodiesel boost

BIODIESEL may be struggling to get started in the UK, but demand elsewhere in Europe is helping to sustain a sizeable area of industrial rape grown on set-aside land here. This year, the area of double low rapeseed grown on set-aside land will be down by 20% to only 29,000ha from the 40,000ha the previous year because of autumn planting problems and relatively low prices. But it has been up to 100,000ha in recent times.

For 2002 harvest the area is expected to rise, as overall rapeseed prices begin to show improvement and growers try to get back into rotation, says Martin Farrow from United Oilseeds.

His company are offering growers minimum price pool contracts. "These give the grower confidence of a minimum price but ensure he benefits from market price increases," explains Mr Farrow. A minimum price of about £115 is anticipated for 2002 depending on movement for industrial oilseed rape. "The varieties grown are all conventional types, and the growers choice, so if treated as a normal crop and should yield the same," explains the companys Martin Farrow.

Will the Chancellors 20p/litre tax rebate be enough to pump prime biodiesel production in the UK? "It might be enough to encourage recovery of vegetable oil, such as used chip shop fat, but it is nowhere near low enough for biodiesel. The rebate brings the tax on biodiesel down to 25p/litre. It needs to be down to 6-10p/litre, on a par with road gas, to have any impact," says Mr Farrow.

Most UK-grown industrial rape goes to the Continent, where biodiesel production is approaching 1m tonnes. And demand is increasing. The mineral oil price is currently very high against a low vegetable oil price, so biodiesel manufacturers are doing very well at the moment.