8 December 1995

Foward buying is no problem

PRODUCER Roger Pinches of Shawbury, Shropshire, has just bought sufficient soyabean meal forward for the next six months.

"I was offered a deal for 12 months but this would have taken us past the next soyabean harvest.

"However I understand though that the planting this year is 16% down in the US because they have sown more wheat. So soyabean prices may go up," says Mr Pinches.

In a similar deal he bought pure fishmeal at £368/t. The forward price is now about £490/t.

"Storage is not a problem here because we mill-and-mix our own feed but when I have bought surplus in the past I have always been able to sell it on.

"Sometimes it is possible to misjudge markets, prices go down and other producers have the advantage of cheaper feed. But, when a product is bought at a price which will secure a profit there is no great risk," he says.

He also says that once the feed was bought, decision making was simpler because cost calculations were based on a known feed price.n