Will Very High Input Costs, Cause A Drop In Production?

bluebell

Member
Well the story of the dairy farmer, in the AG press the other day has for him? my view is that alot of farmers will not buy fertilizer at the currant prices and many might take the view, such as in the beef industry, just cash in the cows, why bother to make sliage, hay etc etc etc, with all the now very high costs in everything from diesil to fertilizer, what views have others got?
 

james ds

Member
Location
leinster
We are not use to getting good prices for our produce , so now this huge rise in costs is a huge issue, but the bottom line is , that food is needed , food prices were kept far too low for too long , that is going to change now very quickly , so it’s very simple if people want food they are going to have to pay farmers a profitable price for it or else do without.
 
Yes it will cause a drop in production but as agriculture is a long term buisness it won’t show up quickly.
Some farmers are relatively well stocked with fertiliser at prices that looked good a month ago let alone today so with rising ex farm prices they should be on for a relatively good 12 months before all the higher prices catch up with them.
Plenty of others, myself included have taken cover on some of our fertiliser requirements at what were until recently unpresidented highs , whilst others, probably a relatively small minority haven’t bought at all. This is bound to lead to some drop in production although in my case hopefully not too great with a good carry over of forage from last summer.

So for this year any drop in production is likely to be relatively small, but next year when we are all likely to be facing higher input prices there is the probability of a much larger drop in production. A lot will hinge on farm output prices, will they rise enough to cover the increased input costs and if they do how long will they last, as I said earlier, farming is a relatively long term buisness, inputs can need to be bought many months/a year or so before product is sold, if ex farm prices should drop in the meantime that could easily result in a loss. This makes farming with high input prices risky, those who are risk averse will likely be cautious/reluctant to but fertiliser at high prices for next year, I suspect there will be bigger drops in production next year but who knows what will happen in the meantime.

One things for sure, I can’t see the current situation leading to rises in production.
 

james ds

Member
Location
leinster
Yes it will cause a drop in production but as agriculture is a long term buisness it won’t show up quickly.
Some farmers are relatively well stocked with fertiliser at prices that looked good a month ago let alone today so with rising ex farm prices they should be on for a relatively good 12 months before all the higher prices catch up with them.
Plenty of others, myself included have taken cover on some of our fertiliser requirements at what were until recently unpresidented highs , whilst others, probably a relatively small minority haven’t bought at all. This is bound to lead to some drop in production although in my case hopefully not too great with a good carry over of forage from last summer.

So for this year any drop in production is likely to be relatively small, but next year when we are all likely to be facing higher input prices there is the probability of a much larger drop in production. A lot will hinge on farm output prices, will they rise enough to cover the increased input costs and if they do how long will they last, as I said earlier, farming is a relatively long term buisness, inputs can need to be bought many months/a year or so before product is sold, if ex farm prices should drop in the meantime that could easily result in a loss. This makes farming with high input prices risky, those who are risk averse will likely be cautious/reluctant to but fertiliser at high prices for next year, I suspect there will be bigger drops in production next year but who knows what will happen in the meantime.

One things for sure, I can’t see the current situation leading to rises in production.
No grain from Russia or the Ukraine this year on the market. That will cause a shortage quick enough.
 

deere 6600

Member
Mixed Farmer
The problem has always been we just keep farming ,,,!!!! But the rise in inputs this time is already making a lot of farmers think hard about where we are going I’ve heard of a few who are saying enough is enough this time so the supply will get less will the rest of us who are goin to battle through this benefit I dunno
 
No grain from Russia or the Ukraine this year on the market. That will cause a shortage quick enough.
Indeed, although I think the original question was regarding domestic production.
I seem to recall but may be wrong that imports and exports of grain are fairly finely balanced, however world markets rule, we’re not very dependent on Russian gas but our prices have shot up none the less.
 

bluebell

Member
i am very lucky to have a few tonnes of fertilizer from last year? if i haddnt i would not be buying any this year? this is for grass, to graze, make hay or silage, on the grass side the past few years its been getting more and more risky, the price increases in both fertilizer, and cereal based creep feed might be the last straw?
 

britt

Member
BASE UK Member
No grain from Russia or the Ukraine this year on the market. That will cause a shortage quick enough.
But most of the grain is still there.
Russia will just export to countries that will buy from them (China, Iran ?) and other countries exports will be redirected around that.
Ukraines spring crops will no doubt be affected, but their winter wheat is already growing and will probably be harvested by someone and find its way onto the market one way or another.

In answer to the OP, yes, many will cut back on costs to reduce the risk. I don't think many will pack up, just cut costs and output.
 
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Flatlander

Member
Arable Farmer
Location
Lorette Manitoba
As farmer we have all wanted this upsurge in prices for years but It’s coming with the upsurge in input. It’s also. Neither will be able to continue without the other. Just inflation that happened so fast. If it had happened over a five year period it wouldn’t look so catastrophic. Some farmer will retire early some cease trading but the majority will nuckle down and graft away, we’ve never had great commodity prices without the inputs robbing us. Challenging times.
 

milkloss

Member
Livestock Farmer
Location
East Sussex
Unless govs do something to affect the market I feel there is likely to be less beef produced. Beef is expensive at the shops already for families and I don't expect famers will see any increase in income if prices do increase although others in the chain likely will.

im sitting on the fert I've got (1/4 of my annual requirements), cows will be sold if necessary. There is a chance that there will be a lot of fert bouncing around should Russia have a huge stash and we all start getting along again suddenly. There is also a chance they will release a lot of wheat from store and crash the market as best they can just as we've all paid £1k a tonne for any fert we can get our hands on. China might join in on this too as they're about as trustworthy as a bull with a headache.
 

kiwi pom

Member
Location
canterbury NZ
Unless govs do something to affect the market I feel there is likely to be less beef produced. Beef is expensive at the shops already for families and I don't expect famers will see any increase in income if prices do increase although others in the chain likely will.

im sitting on the fert I've got (1/4 of my annual requirements), cows will be sold if necessary. There is a chance that there will be a lot of fert bouncing around should Russia have a huge stash and we all start getting along again suddenly. There is also a chance they will release a lot of wheat from store and crash the market as best they can just as we've all paid £1k a tonne for any fert we can get our hands on. China might join in on this too as they're about as trustworthy as a bull with a headache.
I agree with you on the Beef thing, many people just want burgers and mince these days, the expensive cuts just aren't bought by many.
I suspect burgers and mince can be handled by ex dairy cows and Dairy X beef. It makes the suckler job a bit redundant.
If dairy can support much of the beef market into the future - as well as providing the world with dairy products - that could free up land for other things?
I might be a bit biased there, as I've always struggled seeing the point of sucklers when dairy cows exist.
 

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HSENI names new farm safety champions

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Written by William Kellett from Agriland

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The Health and Safety Executive for Northern Ireland (HSENI) alongside the Farm Safety Partnership (FSP), has named new farm safety champions and commended the outstanding work on farm safety that has been carried out in the farming community in the last 20 years.

Two of these champions are Malcom Downey, retired principal inspector for the Agri/Food team in HSENI and Harry Sinclair, current chair of the Farm Safety Partnership and former president of the Ulster Farmers’ Union (UFU).

Improving farm safety is the key aim of HSENI’s and the FSP’s work and...
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