I understand why arable farmers sell a portion of their projected harvest on the futures market. Knowing the cost of production and being able to budget in a profit is probably the correct path for some to follow.
However, having almost totally lost a harvest back in 1985, I will not be taking the chance of being able to fill a contract for even the smallest possible tonnage. I am also not convinced that forward selling is the best tactic in these volatile times, as demand is increasing.
It would be very interesting to view comparative graphs for the last 10 years showing the spot price obtained by selling a twelfth of the farm's grain each month (September to August inclusive) against a similar case of forward selling, in, say, January of the harvest year, for the same 12 months. I suspect this would demonstrate that those who buy forward, rather than sell, are the smarter.
This year's crops have improved dramatically in appearance. Winter barleys are ready for their T1 and winter wheats have really taken off and now look reasonable. Spring wheat, the first time this crop has been on our farm for years, has germinated successfully and it will receive all the care required to allow it to fulfil its potential.
I have bitten the bullet and gone for plastic cover on the forage maize. The extra cost will be £300/ha but this should be recovered in additional yield and valuable energy in the extra starch. The bonus will be the opportunity to establish the following wheat two weeks earlier. The theory adds up, but will the extra income materialise?
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Farmer focus: Allan Chambers