MAXIMISE YIELDS TO SPREAD INPUT COSTS, GROWERS ADVISED20 May 2016
Maximising crop yields to boost returns is the best way to safeguard margins in increasingly volatile global market conditions, visitors to ProCam’s Spring Conference were told. Focusing purely on cutting costs can have unwanted effects on output and plant health with a significant drop in production efficiency resulting, they were warned. The company’s head of production Nick Myers urges,
“Growers need to prioritise reducing costs per tonne of production rather than just cutting back on inputs across the board. The higher the yield, the more tonnes there are to carry their share of the costs and the higher the overall margin.”
Analysis of the company’s 4Cast database for the 2015 harvest years shows the top quartile of customers produced a profit despite the current low grain prices whilst the average UK grower struggled to break even, he explained.
“The top 25% of customers in 4Cast produced around 2.5t/ha more then the Defra national average of 8.8 t/ha for 2015. Our average of 10.t/ha for the year was 1.2t/ha more than the national average at 8.8t/ha. Critically, those higher producers had variable costs of around £40-50/tonne compared to nearer £70/tonne for the average grower. Last year, the top 25% wheat growers would be producing gross margins around £850-900/ha whilst the average would be closer to £600/ha.”
With yields so critical to profitability in 2016, growers needed to re-evaluate any decisions that could potentially affect these, he said.
“ProCam trials have shown a 3.5 to 4.0 t/ha benefit from full fungicide programmes in high disease risk years producing a margin over input costs of between £300 – 400/ha. Even in lower disease risk years like 2015 the yield responses were still around 2.5t/ha over untreated. This isn’t just from controlling diseases, fungicides also influence plant physiology allowing them to take up water better, use nutrition more effectively and stay greener for longer.”
2016’s well established crops looked to have good potential and the appropriate level of inputs was now required to realise this, he added.
“Growers need to focus on managing disease but also ensure they keep crops growing through appropriate nutrition – micro and macro – and promoting rooting to make sure crops remain standing.”
Rabobank senior analyst Harry Smit said producers pursuing higher profits in 2016 were unlikely to get much help from grain prices. The last two years of price limiting abundance were, however, very much against the long-term trend.
“There is rising demand from China and Asia for grain to drive meat and dairy production and this will be a main feature of markets in the future. There is no real over-supply anymore but the restoration of stock levels recently has resulted in grain prices falling. Although markets are currently nervous and react quickly to any change in supply and demand, it is difficult to see a reason for prices to rise much over the next year or so.”
Although margins for UK growers had been hit in recent years because of the reduced prices, generally speaking they had fared better than their US counterparts, he pointed out.
“Indications are that wheat-based UK growers are breaking even with maybe a little profit but corn and soya-based producers in America are suffering the most from the downturn in markets.”
According to Rothamsted research scientist Dr. Nichola Hawkins careful management of fungicides to slow down development of resistance in key diseases like Septoria would be one of the key priorities for growers in the future.
“The azoles as a group have lasted well over the last 30 years but we are now seeing a reduction in eradicant activity. Timing is crucial to get the most effectiveness from their remaining protectant activity and full dose rates are needed to control the least sensitive strains.”
The future was less clear for SDHIs, she said.
“Lab results showed the potential for high resistance risk and we have just reported a less-sensitive isolate from one field site. We are monitoring the situation closely, and urge growers to follow resistance management guidelines, using a maximum of two SDHIs per season and always with an effective mixing partner.”