Rape still viable – but keep costs under control

Benchmarking performance and keeping an eye on input costs will be key for profitable oilseed rape production during the coming season.

Big swings in rape prices, increasing input costs and variable yields mean net margins for oilseed rape have fluctuated considerably over the last five years, says the Agriculture and Horticulture Development Board.

But AHDB analysis indicates that despite the challenges, financially rape still represents a reasonable break crop compared to the legume fallow or herbal ley actions under the Sustainable Farming Incentive, depending on farm system and rotation.

Strong market prices were the main driver of higher net margins in the 2020/21 and 2021/22 cropping years. But in other recent seasons, margins have been tight or even negative, with growers losing on average £100/ha.

Yields 12% below the five-year average contributed to low margins in 2019/20, according to AHDB Farmbench data from more than 200 growers. But Defra figures suggest an even bigger yield drop of 22%.

This suggests net margins might have fluctuated even more for some farmers, says AHDB senior analyst Helen Plant. Increasing costs also played a role among growers who lost money in 2022/23.

Fertiliser prices

“By far the biggest factor affecting the variable costs has been rising fertiliser prices,” says Ms Plant. Fertiliser made up 64% of the total variable costs in 2022/23, according to the Farmbench figures.

“Previously they have typically been less than 50% of the total, with the remainder made up of crop protection costs, seed costs, and other variable costs.” Spot fertiliser prices have since eased but remain higher than before Russia invaded Ukraine.

“Overhead costs have also been rising, in a steadier way, over the last five years. Machinery and equipment costs make up the biggest percentage of overhead costs, along with labour and property and energy costs.”

These overheads – which include imputed costs, such as family labour and rental equivalent on owned land – all saw notable increases in 2022/23, rising by 15% , says Ms Plant.

Better decisions

“Against this cost backdrop, knowing your full cost of production is more important than ever for evaluating net margins. It may also help make decisions about schemes, such as the Sustainable Farming Incentive (SFI).”

“Analysing your business and knowing what it costs to grow each crop in your rotation can also help when marketing your crop. It is difficult to know what a ‘good sale price’ is without knowing the true cost of production.”

Farmbench helps growers identify their strengths and weaknesses by comparing variable and overhead costs to other similar businesses. Cost reduction strategies can then be targeted to the areas with the greatest potential for improvement.

It could identify whether a grower has most to gain from reviewing their fertiliser application strategy, for example, or by using a contractor to undertake fieldwork.

For Farmbench details, visit https://ahdb.org.uk/farmbench