Meath IFA Chairman slams 'hyping' of con-acre prices

MEATH IFA Grain Committee Chairman John McGuinness has accused some of the auctioneering profession of hyping con-acre prices on the back of a one-off event of higher grain prices and creating unrealistic expectations for land owners in terms of land rental values.

Mr McGuinness said: "Contrary to popular belief, the price of grain this harvest has been driven by adverse weather events which affected yields right across the globe and not from the demand from biofuels which utilises less than six per cent of global production.

"Floods in Northern Europe, coupled with heatwaves across central and Eastern Europe resulting in reduced production, were the main price drivers. These events saw a potential 23 million tonnes being wiped off this year's EU harvest."

He said that the return of set-aside land, a reduction in protein crop production, an increase in other land switched to cereal production and a return to normal yields could see a potential increase of 35 million tonnes of cereals in the EU 2008/09 harvest.

"On the global front, the intention of farmers is to increase cereal production at the expense of other crops. The London grain futures are already reflecting these moves and new crop wheat for the 2008/09 harvest can be purchased at a discount of €60 on today's price."

Warning growers, Mr McGuinness said farmers should stand back and take a longer term view before giving away their hard-earned money.

"In addition to con-acre prices seed, fertiliser, machinery manufacturers and suppliers and plant protection companies are all attempting to increase their margins on the back of this one-year event. Seed companies already have jacked up the price of cereal seed by €140 to €180/t.

"If grain farmers are not careful, they will end up financially worse off next harvest than they have been for years."