Background Arable
60.000 euros additional costs for the average arable farmer
An average arable farm with 100 hectares of ware potatoes, seed onions, sugar beet and winter wheat is looking at a cost price increase of at least €60.000 on its farm for the coming growing season. That is what consultancy organization calculates Delphy based on cost calculations. The increased fertilizer and energy prices in particular have a significant impact on the balance.
There is actually no such thing as an 'average', Delphy emphasizes. The situation differs per company. "That is why it is so important that you know what your cost price is," explains arable farming consultant Luc Remijn. "In our overview, we calculated land costs per hectare at €800 for wheat and beets. For potatoes and onions at €1.250. Not every arable farmer does this. It is also important that the fixed costs are included."
Cost cents higher
In the published overview it soon becomes clear that the balance will be meager to say the least next season. Certainly when it is not possible to profit from (significantly) higher product prices. Depending on the crop, there is quickly a cost price increase that is a few cents higher. This is mainly due to fertilizer prices. Delphy calculates with a nitrogen price that will double compared to 2021. The prices for phosphate and potash fertilizers will increase by 150%. At least that is the estimate based on current data. With a 35% increase, fuel – both gas and diesel – is also a significant cost item.
When growing ware potatoes (delivery from storage), the cost price increases by 2,2 cents per kilo. Both fixed and variable costs increase by almost €500 per hectare. Fertilizer makes a big splash in the bag with €340 in costs. "We have calculated for 2022 with a KAS price of €550 per tonne, compared to €270 this year," explains Remijn. "That is why the costs for wheat are also rising sharply. Slurry can compensate for this increase somewhat. Here we have assumed €0 per cubic meter, where €3 was paid this year. The question is whether sufficient slurry is available per region. ." By using 35m³ of pig slurry for potato cultivation, you save €200 per hectare in fertilizer costs.
Balance in the min
The basic cost price for potatoes will thus be 20 cents per kilo next season. This therefore excludes the grower's margin. Irrigation is not included in the balance. The cultivation balance is therefore in the minus, which also applies to wheat and seed onions.
For seed onions from storage, the minus is even greater. More than €2.200 per hectare. Here the cost price increases by 1,7 cents. Remijn: "In the calculation we assume that we irrigate twice. This is reflected in the yield of 50 tons of product per hectare. What plays a role in onions is that the cheap fungicide Mancozeb is no longer available. The alternatives are more expensive. More spraying is also required. against leaf spots and stemphylium, among other things. With the disappearance of Chlorine IPC, weed control is also more challenging. That is why we count with hoeing twice. That costs a total of €170 per hectare."
Beet cultivation more positive
The only balance that shows a plus is sugar beet. Although that is very meager at €122 per hectare. The cost price increases slightly, which is mainly due to higher fertilizer costs. In the calculation, Delphy assumes a 5% higher payout price for 2022. "Perhaps there are arable farmers who buy additional LLBs (membership certificates) and expand the cultivation somewhat", Remijn thinks. "Even selling with straw and supplying slurry, the wheat balance remains negative. Beets can be an alternative. Provided they are dug up properly, the crop does not have to be bad for your soil."
The balance calculations are partly based on in-house mechanization and partly on contract work. Threshing wheat, sowing and harvesting sugar beets and sowing, harvesting and loading the onions. Delphy has calculated the KWIN wage work rate for this. Remijn: "We calculated this year with a diesel price of €1,22 per liter. Next season that will be set at €1,35. Contractors also calculate this, which increases all mechanization costs." If a company with 100 hectares of arable farming on clay soil (50 hectares of winter wheat, 25 hectares of ware potatoes, 12,5 hectares of seed onions and sugar beet) is assumed, the total cost increase will add up to €60.000. Expensive fertilizers and energy account for the largest share of this.
Make your own calculation
This winter, Delphy is trying to make arable farmers aware of the importance of a realistic balance calculation. "In practice, it is simply done very little", Remijn knows. "We pay attention to this in study clubs or individual sessions. Together with the grower you can then fill in the figures that apply to his company." It is clear that fertilization and mechanization must be looked at critically. But in the end, the net proceeds also have an important finger in the pie. A higher yield immediately results in lower costs per kilo of product.
The most important thing is perhaps the price negotiation, the consultancy emphasizes. The cost price increase of a few cents must be passed on and reflected in the various cultivation contracts. This does not even include the increased risk for the various crops. "The aim of this publication is to make people think," summarizes Remijn. "What are the costs on my company, where can I optimize and how should I start my price negotiations."
Niels van der Boom
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