Industrial rape on set-aside attractive
WITH wheat prices on the floor, many farmers are considering increasing their set-aside area this autumn, according to traders, who add that demand for industrial rape contracts is rising.
These contracts are more attractive than in recent years because the discount to commercial rape prices has narrowed from £20-25/t three years ago to just £5-10/t for harvest 2003, they say.
This is a result of more efficient handling, increased competition, and better demand for biodiesel in Europe, says Glencore Grains Robert Kerr.
Rape for harvest 2003 is worth £130-135/t, while wheat is pegged at just £60/t ex-farm. Even allowing for the big yield difference between the crops, these prices make rape look more attractive, says Soufflet Agricultures Andrew Bury.
The merchant has had a lot of interest in its set-aside contract, which can be priced at any time before December 2003, at £5/t below commercial values. "Based on the gross margins that weve done, it certainly does stack up," says Mr Bury.
Richard King, of consultant Andersons, agrees this could be the case on smaller areas of set-aside. But he reckons that growers looking to set aside a substantial proportion of their land could be better off leaving it fallow and halving labour and machinery costs.
Meanwhile, rapeseed values for harvest have risen sharply on the back of strong world markets. Harvest rape is up by about £4/t, to £134/t, while November movement is £8/t higher at £143/t ex-farm. This has brought a spate of farmer selling, and although storing rape could be difficult, it may well pay for some producers, says Mr Bury. *