Contractors are continuing to deliver cereal harvest value despite 2022 cost challenges.
That is according to the FCI, which has issued some combine harvesting costing guidelines for members.
It hopes this will enable them to meet the “significant” cereal and oilseed rape harvesting cost challenges that the 2022 harvest poses.
The move comes against the backdrop of ever-increasing agri-diesel and machinery operating costs.
Weather conditions, the body states, always dictate harvesting output for the Irish cereal and oilseed rape harvest, which is about to begin.
FCI research from among its members can confirm that a modern combine harvester will have an average output of no more than 50ac/day in typical Irish conditions.
For a combine harvester operator aiming to harvest 1,000-acres, it says that equates to no more than full 20 harvesting days per season.
The fuel tank capacity of a modern combine harvester is in the region of 1,000 litres.
The body’s research confirms that this will provide enough fuel for two harvesting days.
It will result in 10 and 12 litres of fuel consumed per acre – depending on the crop and field conditions. The fuel consumption will be 50% higher when a combine harvester is chopping straw, it adds.
The body has been tracking agri-diesel prices with its members on a weekly basis since March of this year.
This week, agri-diesel quotes are averaging at €1.50/L, including VAT.
It says this is more than a 100% increase in fuel costs since the 2021 cereal harvest when agri-diesel cost around €0.65 incl. VAT.
A spokesperson for the body says: “The fuel cost component of cereal harvesting has increased from a minimum of €6.50/acre to €15/€18/acre in 2022, solely as a result of fuel price inflation.”
Break-even rates for a combine harvester
Using the FCI Diesel Price Index calculator system, the association predicts that given an average contractor cost index of 7.0, the break-even rate for operating a combine harvester for 2022 will be €70/ac plus VAT or €80/ac including VAT, before straw chopping.
Michael Moroney, Chief Executive of the Association of Farm & Forestry Contractors in Ireland (FCI), says:
“When we use a conventional costing approach to examine the running costs of a modern combine harvester with a 30% equity investment by the contractor after the trade-in and where the replacement cost is €200,000, the break-even costs per acre will also come to €70 plus VAT.”
“This converts to an annual combine harvester running cost of €70,000 per season plus VAT, over 1,000 acres, for a modern combine in a contractor’s fleet,” he adds.
With a lower 750-acre harvesting output, the costs per acre will increase, he adds.
According to the FCI, the “most significant” combine harvester annual running costs, in this “order of magnitude”, are:
- Depreciation: 28%);
- Agri-diesel: 21%;
- Finance repayments: 21%;
- Labour: 14%.
Furthermore, FCI research indicates that with contractor costs for cereal harvesting at €70/ac plus VAT and cereal prices at €300 per tonne for a 4t/acre crop, the contractor combine harvesting cost to crop value ratio index, when expressed as a percentage, is a competitive 5.8% in 2022.
This, it says, is “competitive” compared with a higher equivalent contractor combine harvesting cost to crop value ratio index figure of 6.875% in 2021.
This was when growers had lower grain prices, and machinery operating costs were also lower.
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