By FWi staff
ITS early days yet, but the strong launch of the Euro this week has boosted returns to farmers delivering grain into intervention, with prices climbing £1.71/t.
That means producers who offered barley for intervention before the Christmas period will be celebrating, as deliveries into store are now making £87.02/t.
But analysts warn that the new European agrimonetary rules, which coincided with the Euros launch, mean future intervention prices are more unpredictable than in the past.
The Green Pound exchange rate, which used to set the price paid on grain when delivered to intervention, has been replaced by a daily Agrimonetary Euro rate.
Because the old Green Pound rate changed only when currencies moved outside certain limits, it often remained the same for months at a time.
That meant it was possible – with some degree of certainty – to predict the approximate value of a crop being delivered into intervention in the near future.
But the new Agrimonetary Euro rate has the potential to fluctuate much more because it is set on a daily basis to more accurately reflect Sterlings position on the money markets.
The slight firming of the Pound yesterday already means that current prices are not expected to last, said Mark Buckingham, economist at Banks Agriculture.
Nevertheless, selling barley into intervention is looking much more attractive than it was before Christmas and many more producers are expected to do this than sell on the open market, said Mr Buckingham.