By Robert Harris
This warning follows the discovery of a recent rogue figure that could have cost farmers a small fortune.
The HGCAs ex-farm feed barley price for the eastern region for the week ending 23 November was quoted at 61.60/t.
This was a 2.50 drop on the week, bucking the general trend, says trader Duncan Smith of Essex-based co-op Grainmarque, whose company deals in 200,000t of combinable crops across the east.
In the same week, the south-east HGCA price rose 2.40/t to 66/t. FARMERS WEEKLYs ex-farm values, supplied by merchants, rose too, with Cambridgeshire and Bedfordshire reporting 65/t, and Lincolnshire 64/t.
The delivered grain figure to East Anglia/London also gained 1 to 73/t, according to the HGCA, with a large boat at Tilbury helping to firm the market.
“Its ex-farm price certainly does not relate to that,” says Mr Smith. “I traded the best part of 2500t for that boat, at 66/t ex-farm.”
Many farmers moving grain, usually malting barley, on contracts based on the HGCA ex-farm value could have lost out, says Mr Smith.
“We had one grower who moved 125t during the week in question. He could have lost up to 550.”
He suspects one merchant or buyer could have deliberately pushed the price down, perhaps because they were due to deliver a large malting consignment.
“I have nothing against the HGCA. But it should be able to spot these aberrations and filter them out.”
The most sensible solution would be to use delivered prices, says Mr Smith.
Gerald Mason of the HGCA agrees. “This certainly highlights why anyone using corn returns as a benchmark probably needs to start thinking about alternatives.”
Futures values could be used as a base, he suggests.
“Our function is to keep an accurate and true record of grain traded.” Corn returns for each region are derived from several sources.
“We would not publish a price using just one, two or even three merchants.
“If anything looks unusual we double check. Given the ongoing concern, we are rechecking again.”
The HGCA cannot comment on whether farmers could be due compensation if the figure is wrong, he says.
“That would be a contractual issue between farmer and merchant.”
Jonathan Hoyland, malting barley trader with Banks Agriculture, says he will be checking the books when the paperwork for buyback contracts moved during the week in question is processed.
HGCA prices are still the bedrock of such trades, he adds.
“We tend to take an average of a couple of areas to even out the highs and lows.”
But volatility is increasing, says Mr Hoyland, and this could explain the low figure.
The three most popular barley varieties are now malting types, which has reduced the volume of feed barley traded.
This means a large tonnage of sub-standard barley bought cheaply could depress the price.
Delivered values are probably the best alternative for now, he adds. “It is difficult to use futures as a base. They often do not trade from one week to the next.”