Farmer Focus: Hindsight is painful when grain prices fall
Richard Harris © Emily Fleur They say hindsight is a wonderful thing. And it certainly feels that way now, with current grain prices and future November 2023 prices falling away from the summer/autumn highs.
We have our feed wheat and spring barley to sell, and it feels like we’ve missed the boat.
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This really hurts when you put the price difference into the Excel gross margin – £280/t versus £230/t makes a considerable difference even on a small area.
Were we too greedy, expecting prices to hold or improve going into 2023? Hindsight would indicate we were.
Historically, we are late sellers, generally moving grain in May and June hoping for that late season spike. This has worked in the past, and certainly did last year.
I fear jumping between selling strategies could leave us at the bottom or lower end of the market if we get it wrong, so sticking to one system averages that out over a long period of time.
Although it feels like we might be on the lower side of that average this marketing year and maybe next.
A sensible strategy might be to sell one third once it is established.
This would cover all our input costs for the coming season and offset the risk of buying expensive fertiliser and selling cheaper wheat.
We could then sell the second third before harvest, covering the fixed and variable costs, leaving us the final third to play around with after harvest.
Sounds more sensible and reduces risk compared with our current strategy, but perhaps it’s a little more boring.
We will test our Laureate spring barley again to see if it can make malting – autumn results were all promising other than a higher nitrogen score, which could compromise our marketing options.
If it makes the grade I think we’ll look at moving it on while the malting premium is still healthy.
