Lincolnshire farmer gives thumbs up to new grain marketing course

Grain marketing is an important driver of profitability. So a new price risk management course had plenty of appeal, writes former Farmers Weekly Barometer farmer Ben Atkinson


The two main factors that influence our bottom line in producing grain are how big the heap is in the shed and how much we sell that heap for.


We can influence its size through our husbandry, but at the end of the day most of it is determined by Mother Nature.


How much we sell it for is a different matter. In the past year we’ve seen that market volatility can be massive, with the difference between bad and good prices enormous.


It’s fair to say that today’s volatility and swings are far greater and quicker than in days past, and there are more factors influencing the price. So getting it right is essential for long-term financial stability – hence my decision to enrol on the Offre et Demande Agricole price risk management course.


I don’t think my previous or current marketing strategy is vastly different from that used by most farmers. I talk regularly to a handful of traders and listen to their opinions. I read daily and weekly market reports that arrive via text, email or with a nice yellow cover on Friday mornings. I then add a little gut feeling and make my decisions.


This strategy has generally served us well and is probably still very good.


However, given the economic climate both within our industry and in general, a more in-depth understanding of markets and the tools available must be a positive move.


ODA is a French company that has provided market knowledge, training and advice to French farmers and co-operatives for several years and is expanding into other countries, including the UK.


Its performance over 10 years is available on its website (www.oda-agri.fr/) and is quite impressive. Its objective is for all sales to be within the top third of a marketing range in any given campaign.


I first saw a presentation by ODA three years ago at a Syngenta meeting. More recently Brown and Co teamed up with the firm and has organised several two-day training courses.


The first day was spent mainly looking at market fundamentals.


This included the domestic and global factors that influence markets, market foundations and history, terminology, economic laws, and analysis. We then moved on to futures markets, starting with their formation and functions and then examining their workings and mechanics.


The second day continued with futures, but focused more on where to find information and, more importantly, how to interpret it.


We then looked at the tools available to us for use with spot, forward and futures markets and contracts. We also learned how to establish and activate such contracts at a farm level through merchants or brokers.


The course was very informative and I can’t deny that the theory and strategy behind it should help me make informed decisions on marketing.


However, there was much to absorb in two days and I still don’t feel confident enough to put everything into practice.


My initial reaction is that market analysis and the strategic approach are beyond the realms of farmers’ ability purely on the time requirement. They’re more appropriate for a grain trader or fund manager.


The next stage, if you’re convinced, is to take out an annual ODA subscription, for which you receive regular market information, phone and email access to its consultants and have regular group meetings with other consultants and other subscribers.


ODA stressed the importance of local groups in creating an easy environment in which to discuss ideas and experiences.


A marketing approach is offered suggesting a proportion of the crop to market and the best method with which to transact the amount to limit risk and maximise returns.


Having had time to contemplate the course and discuss this approach with grain traders and other people on the course I think it could be workable and very beneficial.


The danger is information overload and misusing the tools through lack of understanding and experience. But going back to my initial reasons for joining the course, it would be wrong to admit defeat and not to give it a go – as they say, nothing ventured nothing gained.


The easiest option is not always the best or most lucrative. As farmers we’re generally guilty of not giving the marketing side of our businesses the time it deserves, especially given its importance.


The course and subscription aren’t cheap, £600 and £1600 a year, respectively. But in terms of pence per tonne the outlay could quickly pay for itself.


My hope now, with more market understanding, is to improve my returns through missing the market lows and hitting more of the highs.


The ODA objective of achieving returns in the top third of a marketing campaign initially didn’t sound very ambitious – I’d expected perhaps top 10-15% predictions. But on reflection I’d be quite happy with top-third returns year on year.


I’m still concerned that following the guidelines word for word may be too time consuming and in-depth for a practical farmer. But I hope a working compromise will deliver many of the benefits and that appreciation of potential pitfalls will be enough to negate them.


It’s also difficult to start the strategy when ODA advised its clients to sell most of the 2009 harvest crop last year, a good move given the current state of the grain market. Most of us on the course had sold only a small proportion.


ODA readily admits that trying to hit the very top of markets and greed-driven sentiments often fail to deliver.


Having spoken to an independent grain trader, I understand that most of the tools available can be activated through the trade without direct involvement with specialist brokers or spending too much time.


Course background



Discussions with farming clients in today’s increasingly volatile market highlighted a clear need for an independent professional approach to crop marketing, according to Paul White (pictured below), partner and business consultant of Lincolnshire firm Brown & Co.


“While HCCA and others may offer training, and a few individuals provide independent advice, I came to believe there was no single fully rounded package available in the UK,” says Mr White. “So in spring 2007 I travelled to France to be introduced to ODA.


“I was impressed by its business model and thought it worth replicating here. So we started organising delivery of the service last spring.”


Users must undergo the training before accessing the subscription and advice service. However, farmers remain free to continue trading with other organisations.


Brown & Co’s role is organiser and co-ordinator.


“While no formal structure exists between our two firms we see great benefit in the service and are promoting it widely to interested parties.”



  • For more details contact Paul White on 01775 722 321 or email paul.white@brown-co.com

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