Cereal growers tipped to profit

By FWi staff

MORE cereal growers will return to profit next season due to better forward grain prices, despite lower winter wheat plantings and reduced yield potential, according to the Home Grown Cereals Authority.

Feed wheat for November 2001 is worth 79/t ex farm, barley 71/t and oilseed rape 135/t. This compares with current average HGCA prices of 64/t, 63/t and 123/t respectively.

Assuming a 5% reduction in cereal trend yield and 15% set-aside from the obligatory 10%, due to reduced spring plantings, incomes on a typical 100ha (250 acre) model farm rise to 8000.

If wheat area is reduced by 20% and replaced by spring crops and set aside incomes will average 6000.

And where trend yield is reduced by 5% and wheat area reduced by 20% income falls to 3200.

These compare with an expected loss of 2000 this season.

However the HGCA notes those farmers worst affected by the wet weather are likely to experience another year of negative incomes.

Cereal growers will also see a profit following the 2002 harvest. Again using current forward values the HGCAs model predicts that net farm incomes in 2002/03 will be 6,600.


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