Don’t sell crops to raise cash

ALMOST TWO-THIRDS of farmers may market crops early to plug the cash shortage triggered by delayed single farm payment cheques, says HSBC.

Steve Ellwood, head of agriculture at the bank, said farmers needed to weigh up the cost of borrowing extra money against that of having to make a forced sale.

The findings were revealed at Cereals 2005 this week and came from a recent survey of 253 farmers responsible for 116,150ha (287,000 acres) across England.

“Decisions on how and when to market grain should not be driven by cash flow but by a properly thought-out marketing plan which aims to optimise price in a volatile market,” Mr Ellwood said.

“It is unlikely that the best marketing policy will be the forced sale of grain in September.

“Our advice would be to use the next few weeks to put together plans for 2005/06.

“Focus first on farm profits, taking a long-term view on the right cropping mix. Work out the cash needed to carry it out and approach your bank for support.”