Next year’s Sentry conference explores how global markets and extreme price volatility can be reconciled with food security for the nation and the stability that farmers need. It’s an essential briefing for modern farm businesses, writes conference chairman David Richardson.

More than 40 years ago, when Professor John Nix launched his famous Farm Management Pocketbook, the main changes in each annual edition for several years were minor adjustments in guaranteed prices and input costs.

Later, when the UK joined the European Economic Community, he recorded small amendments to community measures and intervention systems. But these varied little from what had gone before. Budgeting could be simple and accurate.

Perhaps that’s overstating the predictability of those days. And maybe it didn’t feel that simple at the time. The weather was always variable. But, with the benefit of hindsight, it must have been easier than today.

Production-based aid has virtually disappeared. Supply and demand on world markets, together with the effects of currency fluctuations, rule prices. And extreme weather, distorted, some say, by climate change, exaggerates swings in commodity values from one season to the next, sometimes in the same season.

In the past five years, wheat prices have gone up and down like a yo-yo. The least volatility was in 2005 when values varied by just 12% through the year. Since then, volatility has been up to 77% in 2007 and down to 31% in 2009. This year, it looks like being between 60% and 70%, but it might be higher.

This is what happens when production controls and or stimulants are removed and prices are free to find their own level according to supply and demand. Economists and politicians love it because they claim it is self-levelling and needs no intervention in the market. But it’s hardly an ideal recipe for stable production or a low cost of living. Nor does it provide food security.

We are all familiar with what happens. World commodity prices rise because of a perceived shortage and farmers make good a profit. The following year, all over the world, they plant extra acres in the hope of cashing in on improved returns. But the extra acres produce plentiful supplies and prices collapse. Profit turn into loss, leading to reduced plantings the following year and prices rise. And the cycle begins again.

A simplistic scenario, perhaps, and there are usually other factors involved to complicate the picture. But it is essentially accurate and it leads, as we’ve seen over the past few years, to feast or famine. The question must be asked: Is this acceptable in a world where demand for food is rising in parallel with the number of people who are always hungry.

These are some of the issues that will be debated at the Sentry Conference 2011. Inevitably, the future of the CAP and what happens after 2013, when its mandate expires, will feature heavily. But now we rely on free markets we need to have a world view and to help understand what is happening we shall hear from a speaker who spends his time studying the interactivity of farming activities worldwide.

Some production sectors of our industry have never had the luxury of stable prices or government aid and are not interested in interference in their businesses. They would rather be left to their own devices to deal with food wholesalers and retailers. They will all be represented too.

Finally, we will hear from the man who will help create the context in which we will do business in the next few years. Farm minister Jim Paice MP, in opposition, has been a regular at Sentry conferences and has sometimes contributed from the floor. This time he will be on the platform to tell us his vision for the future.

Book your place

• The Sentry Conference 2011 takes place at Chilford Hall, Linton, Cambridgeshire

• To book your place click here or contact Linda Linton on 01473 658 058, or email lindal@sentry.co.uk

• Places cost £95, plus VAT, including a three-course lunch

• The Sentry conference 2011 is sponsored by Agrovista, Bayer CropScience, Birketts, and supported by Farmers Weekly