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Spring OSR Predicted to Deliver

Date Added: 19/01/2010

An analysis of the variable costs versus gross output for a range of cropping options shows that oilseed rape is set to remain as one of the most profitable spring sown crops this year, according to Richard Elsdon, technical manager for United Oilseeds.

The figures below indicate that spring oilseed rape has the potential to achieve a gross margin of £320 per hectare, a figure that is some £14/ha more favourable than spring sown malting barley at current market prices.

"Spring oilseed rape is predicted to be one of the most profitable options for farmers who need to include a spring sown crop in their rotation," Mr Elsdon explains. "Alternatively, for those arable producers that have favourable growing conditions, large blue peas should also be considered as a suitable break crop as they are predicted to achieve a gross margin close to £385 per hectare, despite a drop in market prices over the last 12 months."

Estimated gross margins for spring crops – Harvest 2010

 

Spring Barley (malting)

Large Blue Peas

Linseed

Spring Oilseed Rape

Spring Beans

Output

 

 

 

 

 

Value (£/mt)

100

160

280

254

130

Yield (t/ha)

5.25

3.75

1.75

2.0

3.7

Income (£/ha)

525

600

490

508

481

Area Aid (£/ha)

 

48.32

 

 

48.32

Gross income (£/ha)

525

648.32

490

508

529.32

 

 

 

 

 

 

Variable costs

 

 

 

 

 

Seed (£/ha)

55

97

80

41

69

Fertiliser (£/ha)

80

38

72

70

37

Sprays (£/ha)

84

130

51

77

81

Total variables (£/ha)

219

265

203

188

187

Gross Margin (£/ha)

£306

£383.32

£287

£320

£342.32

Data source: John Nix Farm Management Pocketbook (crop values adjusted in line with recent market movements)

The forecasted gross margins for winter and spring oilseed rape are up by 20% and 30% respectively compared to the 2009 harvest. This is largely due to lower nitrogen prices which have dropped back by almost £200 per tonne, as well as a slight improvement in harvest 2010 crop values for oilseed rape.

For spring pulses, gross margins are expected to show a contrary result with large blue pea margins falling by 18% compared to last year due to a fall in value from £225 per tonne to a forecasted £160 per tonne. However, a £50 per tonne reduction in the cost of replacement phosphate and potash has helped to cushion what would have been an even steeper drop.

Meanwhile, Mr Elsdon predicts that spring bean prices will remain relatively stable compared to last year and have benefited from lower phosphate and potassium prices. This has resulted in a 35% gross margin increase over the 2009 figures. Linseed gross margins are also expected to show a healthy increase of 70% on last year as a result of increased market values and the significant reduction in fertiliser costs.

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