On-farm competitiveness of rapeseed – selected results of the agri benchmark Cash Crop Report 2008

Abstract

Due to the changes in the European biofuel politics the demand of rapeseed oil and hence the rapeseed price might decrease in the medium term. The question arises what this means in terms of on-farm competitiveness of rapeseed relative to other crops. The agri benchmark cash crop network of farm economists, advisors and growers provides a international farm comparison on a uniform basis. The agri benchmark cost calculation shows that rapeseed production in 2007 was not covering total cost in most countries, which was mainly driven by an unfavorable price ratio between rapeseed and other crops, especially grains. But this analysis does not take into account the economic and agronomical value of rapeseed as previous crop. However, the benefi ts of a break crop are not unlimited and there must be a limit beyond which growers are encouraged to forego these benefi ts and move to a pure grain rotation. Even though crops like barley, rye, or sunfl owers have been chosen as the next best alternative, rapeseed generates usually a lower gross margin than the respective alternative. To indicate the economic pressure on rapeseed production, the differences between the break-even price of rapeseed and the prices of the alternative crops are compared, which in many cases are very high. On-farm competitiveness of different crops is driven by price ratios rather than by absolute prices. There are remarkable differences between the countries. In two of the German farms and on the British farm, rapeseed generates a gross margin comparable to the alternative crop only when the rapeseed price is two times higher. In contrast, on the Hungarian and Romanian farm the break-even ratio is in the range of 1:1.2.