Plan Now to Relieve the Pain of Rising Farm Costs
With higher animal prices being offset by large increases in input costs such as fertiliser, meal, fuel and contractor charges, Andy Ryder, Drystock Advisor, Teagasc Westport advises on where farmers can make adjustments to maintain a level of output without input costs crippling farm profit
The positivity of higher prices for animals in 2021 has continued into 2022, with strong signals that these prices will continue well into the year. The mild winter has meant grass supply is ahead of normal on farms and silage stocks are, in most cases, adequate. Another certainty is that the direct payments received this year will be similar to last year. Consequently, farmers can be relatively confident about the amount of money coming into farms this year.
But, what is frightening for farmers is the large increase in input costs such as fertiliser, meal and fuel and contractor charges. If these costs are not kept under control farmers will face big losses. Farmers cannot control input costs. However, they can control the amount and type of inputs they use. So, where can farmers make adjustments to try to maintain a level of output without having input costs crippling farm profit?
Fertiliser prices have increased nearly threefold in the past year. For example, a five thousand spend on fertiliser last year would equate to a twelve to thirteen thousand spend this year for the same type of fertiliser. Farmers need to put a budget in place to determine what amount they are willing to spend on fertiliser. Examine the most recent soil samples for the farm to determine soil fertility. This will give you a clearer picture of the type of fertiliser required.
Establish where you are going to apply the fertiliser. Silage ground will need 80-90 units of N per acre. All slurry should be applied to silage ground and low index grazing ground to reduce the amount of chemical phosphate and potassium that need to be purchased. Applying slurry early in the year will get the best response from the nutrients in the slurry.
Application Rates and Timing
Every farm is different but ensure to check forecast, soil temperature and ground conditions as applying fertiliser in poor conditions will increase the risk of losses. It is advised to maintain the number of applications but lower the rate per application.
As the cost of feed has increased in recent weeks and is likely to increase further, farmers will need to use it strategically this year. A lot of meal was used on farms last year to feed lambs where better management of grass would have finished these lambs. Farmers will now need to plan whether to finish lambs, keep weanlings over the winter or sell a portion of weanlings prior to housing, to cut the demand on silage and meal.
This is not a year to have non-productive stock such as dry cows, culled ewes or poor hoggets. Endeavour to cull early in the year and stick with your decision, as this will reduce grass demand in Autumn and forage requirements next Winter.
Lime is currently the cheapest form of fertiliser available. Get it out as early as possible with the exception of silage ground. It will help to unlock nutrients in the soil and make applied nutrients work more efficiently.
Additional costs need to be avoided this year but the introduction of more grazing divisions using temporary electric fences will enable strong paddocks to be taken out as bales instead of topping. This will help to avoid grazing re-growths and allow farmers to manage grass more efficiently.
This is a long term strategy but farmers need to start over-sowing clover on suitable parts of the farm. This will help to reduce fertiliser bills in the future.
Finally, I would urge farmers to discuss their options with their advisor. Seek as much information as possible to plan a strategy to get through this year. Some farmers will need to contact their bank managers to change repayment schedules and look for extra credit. I would recommend talking to other farmers to see what changes they plan to make to manage costs this year.
Best of luck and remain positive.
More advice in this area can be found at Food and Feed Security for Grassland Farmers on the Teagasc website. You might also like to read Grazed grass is still the cheapest and best feed for cattle
If you have any questions about this topic you can always talk to your Teagasc advisor.
Along with Teagasc specialists and researchers, Teagasc advisors also regularly provide articles of interest on Teagasc Daily.