AD Forage cost threshhold

[capfits]

Hi all,
Clearly with all this dry weather the amount of feedstock for both livestock and AD plants is looking pretty tight.

My question is at what price for forage will AD plants be turned off?

While I appreciate they are all different there must be a point at which even they become uneconomic to run.

Up here in Scotland they appear to be hovering up Draff like nobodies business and there are tales from elsewhere of big prices being paid for mediocre forage to feed them.

 

[thesilentone]

You are correct, and this happened in Germany some years ago decimating the AD supply trade.

But, it is good competition, so the Government should stop meddling with tariffs based on energy crops.

 

[Henarar]

Hopefully they will be turned off for good soon

 

[Will Wilson]

If the AD plant is running off a waste stream / cropping controlled by the owner of the plant (which most are) then they can charge themselves whatever they like for the input and the weather is unlikely to affect the supply. If they aren't and they are buying from another source then I would expect there to be a contract, for example buying from a local farmer.

If they haven't got either in place and the contract is not fulfilled due to climate then they will have to source elsewhere or feed the plant less.

In a nutshell it would have to be an incredibly high 'spot market' with a terrible harvest to force the plants to close.

 

[Suffolk Serf]

I saw the accounts of one recently. Big losses and a negative short term balance, but within another strong business, in a year of plentiful forage supply. I really think that one might end up mothballed looking at the current state of the maize crops due to feed it.

 

[Will Wilson]

There is a fair amount of cost involved in moth balling a plant - time will tell.

I could rain for weeks in August?

 

[Exfarmer]

I saw the accounts of one recently. Big losses and a negative short term balance, but within another strong business, in a year of plentiful forage supply. I really think that one might end up mothballed looking at the current state of the maize crops due to feed it.

You have to remember accounts are drawn up to suit the owners of the business. Many farm business’s rarely show a profit but this is more about not paying tax than a shortage of income. I must admit to having a bit of an issue here myself

 

[Suffolk Serf]

You have to remember accounts are drawn up to suit the owners of the business. Many farm business’s rarely show a profit but this is more about not paying tax than a shortage of income. I must admit to having a bit of an issue here myself

I did wonder if they were up to that, doesn't make it look too good for trying to sell it!
My accountant won't play those games, I've got a tax bill coming up equating to ten times my BPS payment.

 

[Exfarmer]

I did wonder if they were up to that, doesn't make it look too good for trying to sell it!
My accountant won't play those games, I've got a tax bill coming up equating to ten times my BPS payment.

There are plenty of buyers for a tax loss.
You may need to change your accountant.

 

[warksfarmer]

I did wonder if they were up to that, doesn't make it look too good for trying to sell it!
My accountant won't play those games, I've got a tax bill coming up equating to ten times my BPS payment.

You need a new accountant.

 

[Suffolk Serf]

You need a new accountant.

My bps payment is a tiny proportion of my turnover.

 

[thesilentone]

Having just traveled to Surrey and Hampshire, it is clear the Maize is a disaster.

Whether it is going for cattle feed or AD, the crops are less than half what they should be at this time - problems ahead !

 

[Jim Pace]

I am not sure the problem is as bad as this. Last year there was a 30% greater yield than expected, and I don’t think we were unique in this respect.

As a result people have cut back but reserves are still in the clamp. People have known for a while that the maize is going to be bad this year, so could have whole cropped some wheat or other cereals. Perhaps more grass will go in this autumn to give an early crop in mid spring.

AD can and I think will always out compete livestock for feed. We are nowhere near the density of plants in Germany. I am not for one moment saying it will be easy, and some will find it harder than others, but nationally the problem is not going to see a rethink other than to perhaps encourage people to build more clamp space!

 

[Whynot]

I agree Jim.
While it is very hard for some people due to lack of forage, it isn’t down to the AD industry in the main.
We currently feed 800 acres of maize to our plant, with half grown on our own farm. The remainder is grown by six local farmers, who are alll using it as a break crop. I have also got another 5-6 local ones who are keen to get involved.
Local Dairy/livestock farmers could ask 10’s of local arable farmers to grow forage for them, but it needs to be planned a year in advance.
As an ex dairy farmer i realise some people are going to have a long hard winter but it is not as simple as just blaming other people.
We are not affecting the local market in renting land and we also have a big enough home farm to take production back in hand if needed.
Some livestock farmers will struggle but so will some AD plants. It could also be a good opportunity for others.
I know a local dairy farmer who has bought 40 cows off another farmer for under £500 each, some might say he was taking the P by paying well under half price. He’s just paying the market price due to the fact that he has a well run farm with an extra 6 months of forage available and he whole cropped some cereals. Farmers are good at blaming other people when things go wrong but sometimes we need to look closer to home.....

 

[Henarar]

I agree Jim.
While it is very hard for some people due to lack of forage, it isn’t down to the AD industry in the main.
We currently feed 800 acres of maize to our plant, with half grown on our own farm. The remainder is grown by six local farmers, who are alll using it as a break crop. I have also got another 5-6 local ones who are keen to get involved.
Local Dairy/livestock farmers could ask 10’s of local arable farmers to grow forage for them, but it needs to be planned a year in advance.
As an ex dairy farmer i realise some people are going to have a long hard winter but it is not as simple as just blaming other people.
We are not affecting the local market in renting land and we also have a big enough home farm to take production back in hand if needed.
Some livestock farmers will struggle but so will some AD plants. It could also be a good opportunity for others.
I know a local dairy farmer who has bought 40 cows off another farmer for under £500 each, some might say he was taking the P by paying well under half price. He’s just paying the market price due to the fact that he has a well run farm with an extra 6 months of forage available and he whole cropped some cereals. Farmers are good at blaming other people when things go wrong but sometimes we need to look closer to home.....

don't think anyone is blaming those that run the ad plants, just blaming the government for such a ridiculous waste of government money

 

[Whynot]

Trust me, there’s lots of people looking to blame AD plants! The argument about AD more generally is one I could have, but it would be very boring and never ending.
As would the discussions about wind, solar, nuclear, BPS etc.

 

[A1an]

I've got a tax bill coming up equating to ten times my BPS payment.

id love a big tax bill. It would mean I’ve actually earned enough to have one.

 

[Henarar]

I don't blame the people that run the ad plants for doing it I would think it makes money or why bother, government policy on ad plants on the other hand is shocking

 

[Henarar]

I agree Jim.
While it is very hard for some people due to lack of forage, it isn’t down to the AD industry in the main.
We currently feed 800 acres of maize to our plant, with half grown on our own farm. The remainder is grown by six local farmers, who are alll using it as a break crop. I have also got another 5-6 local ones who are keen to get involved.
Local Dairy/livestock farmers could ask 10’s of local arable farmers to grow forage for them, but it needs to be planned a year in advance.
As an ex dairy farmer i realise some people are going to have a long hard winter but it is not as simple as just blaming other people.
We are not affecting the local market in renting land and we also have a big enough home farm to take production back in hand if needed.
Some livestock farmers will struggle but so will some AD plants. It could also be a good opportunity for others.
I know a local dairy farmer who has bought 40 cows off another farmer for under £500 each, some might say he was taking the P by paying well under half price. He’s just paying the market price due to the fact that he has a well run farm with an extra 6 months of forage available and he whole cropped some cereals. Farmers are good at blaming other people when things go wrong but sometimes we need to look closer to home.....

how long would ad plants be competition to farmers if they didn't get any production subsidy
could they afford to compete with the farmer buying the crop for feed without it

 

[maen]

Equaly, you could argue how many dairy farms will continue to be viable without BPS, production grants, Welsh grants, Scottish grants etc etc. Most robots in the SW are heavily subsidised by (indirectly) EU grants.

Putin is currently in Germany cementing the relationship that supplies massive amounts of gas from Russia to mainland Europe. Renewables beats the Stalag.