Marketing your grain is road to best returns…
CEREAL growers must move from selling grain to marketing it, with all that entails in terms of market information, planning and checking contracts.
Fail to do that and you will fail to achieve the best returns, says the Home-grown Cereals Authoritys Alastair Dickie, a key seminar speaker at Grain 2001.
"Gone are the days when a market, even if only Intervention, was waiting," he says. "With little of the safety net still in place and area aid accounting for 40% of returns, growers must be up to speed with marketing if they are to obtain the best price."
Growers need to know the target market before the crop is drilled so the correct variety is used and specifications met, he stresses.
Growers should also discover the location of local millers and ports handling grain, and what they want. Delivering to a nearby outlet reduces transport costs and if specifications are not met there is less chance of increased costs when loads are returned.
"It is also important to deliver to a known price. It is not good business to discover it is lower than expected at the last minute and to refuse to sell. That is a recipe for sub-optimal returns, as grain may have to go to another customer further away who has different specifications. Some mechanism for fixing price well ahead of delivery date is needed."
Demands are changing, quality specifications are tightening and there is greater need for traceability and assurance, he adds.
But physical grain quality requirements are becoming more flexible, as technological improvements are exploited at the mills. Five years ago millers supplying baking flour would not take wheat with a Hagberg of less than 180; now 110 can sometimes be used.
Niche markets with specific requirements are available, but growers must read the small print when signing contracts. If specifications are not met and the price is not what was expected, they could still end up with sub-optimal returns.
"Growers should know what they are signing and what they have to deliver before it leaves the farm. HGCA has applied for Treasury funding to develop a self-help sampling and grain analysis system to give them more control over marketing," Mr Dickie concludes.