Marketing makes the difference in grain

By Olivia Cooper

GOOD grain marketing can make the difference between profit and loss, a report by accountant and financial adviser, Tenon, has shown.

A survey of arable clients in Hampshire showed annual average prices achieved for feed wheat ranged from 58/t to 70/t last year.

On a 250ha (617acre) wheat unit yielding 8t/ha (3.2t/acre), this gives a variation of 24,000.

With an average income of only 3/ha (1.20/acre) after rent and finance, for many this is the distinction between profit and loss.

Gerald Mason, senior economist for the Home-Grown Cereals Authority, expects last years exceptional fluctuations to become the norm, as the UK trades more in a world market without price support.

There are various ways to safeguard against these oscillations, he says, but the most important is to have a marketing plan.

“A clear plan is essential. It should use target prices, cash flow and storage requirements to set out the rhythm of sales throughout the year,” he explains.

Chris Monnington, Tenon rural services director, agrees: “Inevitably there will be times when a farmer will wish he had or had not sold.

“It is therefore important to have an idea of the break-even price. Anything above this then becomes a bonus.”

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