Growers should avoid using the same selling strategy as last year and start forward selling the new crop now to lock into current prices, grain traders have said.
Any famers hanging on to old crop should sell it as soon as possible, and look at forward selling 40-50% of the new crop, as they would in a normal year, said Gleadell managing director David Sheppard.
Speaking at a debate at Cereals 2013, Mr Sheppard said: “The risk is you don’t sell anything today and you take £15-20/t less in a couple of months’ time.”
“The risk is you don’t sell anything today and you take £15-20/t less in a couple of months’ time.”
David Sheppard, Gleadell managing director
Growers faced the prospect of a double whammy year – lower yields and lower prices. To try and mitigate this, farmers were advised to assess cost of production and the margin available by forward selling a proportion of the crop at current prices, he said.
Prices were by and large dominated by supply and demand in the global marketplace, with the UK just a small player in the bigger sphere, said NFU combinable crops board vice chairman Mike Hambly.
The grain supply chain needed a better balance to reward risk-takers and farmers making investing for the future, he said.
“While we cannot influence the weather, and we don’t have enough of the market to make significant impact on world prices, we can make sure that our grain merchants see us as important, valued producers,” said Mr Hambly.
“We need to cultivate those relationships which will lead to greater opportunities to build our businesses.”
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