12 July 2002

Looking at crop costs

AS we roll inexorably toward harvest I think its probably safe to assume that any expenditure on combinable crops is now complete. At the end of May (On Our Farms, May 31) we printed the variable cost spend to date compared with harvest year 2001 and thought it might be interesting to update that table now (Table 1).

The costs of growing wheat, oilseed rape and peas for harvest 2002 are marginally lower than those for last year and reflect little or no change in agronomy. In contrast we have a 10% increase in the production costs for barley although total pesticides costs in 2002 are down by more than £6/ha (£2.43/acre). But nitrogen costs have risen by nearly £19/ha (£7.70).

This was effectively the cost of applying seed bed nitrogen after drilling and an additional 20kgN/ha (16 units/acre) in the spring to total 140kgN/ha 112units/ acre) applied in early and late March.

Was this justified – only time will tell? But severe herbicide damage last autumn when IPU was washed into the root zone after heavy October rainfall forced me to react with both a spray of manganese and an application of urea in an effort to nurse the barley back to good health. As for the extra spring nitrogen, our feeling was that the crops could stand a little more while hopefully not prejudicing the nitrogen content for malting barley.

Unfortunately prices for all these crops have nose-dived in the past 12 months. Table 2 shows the comparative prices for combinable crops quoted in the first week of July for both 2001 and 2002.

Feed wheat has dropped by 26%, Class 1 milling wheat by 29%, feed barley by 20%, oilseed rape by 2% (due to a perceived world shortfall) and peas by 17%.

With the announcement that the UK compound feed production is down and crop estimates for harvest in the EU and the UK are up, this gap can only widen as time goes on.

Our position at Easton Lodge has not been helped by the weather. The light stony soils around Stamford in South Lincolnshire thrive on wet weather during April, May and June but this year conditions have not obliged (Table 3).

The drought in June last year was partly instrumental in reducing specific weights in our Malacca milling wheat below 74kg/hl which have not gone down too well at the mills. Similar conditions this year do not bode well and as a consequence of both writing down yield and price in my forecast we have taken around £13,500 off our gross margin from that prepared three months ago.

Hopefully, applying 410 litres/ha of home-made foliar urea over 55ha (136 acres) of Malacca milling wheat to deliver 46kg/ha (37 units N/acre) at the grain cheesy-ripe stage will prove worthwhile.

That process appeared to pay off last year and produced a grain protein in excess of 14%. The cost is £10.31/ha and could help to win us a premium for Class 1 wheat of £68/ha based on 8.5t/ha (3.44t/acre) yield at £8/t premium over feed.

On the other side of the balance sheet costs rarely go down and this year has been no exception. Our forecast shows that power and machinery costs will rise by nearly 10% this year compared to last due mainly to two bills totalling nearly £8000 for a new clutch and reconditioning the synchromesh in the gearbox of the Fendt 395 tool-carrier.

Add to which as I am writing this copy I have just received the news that our Ken Wootton slurry tanker of 12 years vintage has just split and cannot be repaired.

I remember some time ago the Queen announcing on her Christmas Day address to the nation that she had experienced an annus horribilis – I think 2002 could also be described as such for Easton Lodge. &#42