Prices are on a rising path but beware pitfalls
Prices are on a rising path but beware pitfalls
By Susie Horne
STRAW prices are on the up for a host of reasons. But traders urge growers who are keen to boost income by selling straw to proceed with caution.
Prices this spring have risen for several reasons, including stock being kept in because of the late wet season and as a precaution against foot-and-mouth disease. A large tonnage has also been used in pyres.
With a much lower overall cereal area, a larger proportion of spring cropping and poorer yield prospects, straw values could feature more strongly in budgets.
"There could be opportunities for prices to increase," says consultant Jamie Gwatkin of Andersons Bury St Edmunds office. "Pig producers in East Anglia have had to use a lot more straw as housing for weaners, because of foot-and-mouth and swine fever movement restrictions."
Chopped straw is worth £20-£22/ha (£8-£9/acre) in P and K value, so on farms with good P and K indices a typical price of £25/ha (£10/acre) for straw in the row might be worth taking, he says.
"But you have to have a good relationship with the person taking the straw and they must have the proper kit to do it. You dont want to reduce your following crop opportunities for the sake of £10 an acre."
That view is shared by auctioneer Kevin Prince, of Dreweatt Neate. It is the main reason why most straw sold in the row is sold by privately.
While there is the possibility of writing deadlines into straw sale agreements, these are difficult to enforce. The risk is that if enforcement is necessary, then the time the grower seeks to gain by taking that route will be lost in any case.
"Barley would definitely be the one to bale, and into small bales if possible," says Mr Prince, whose trading area includes Oxfordshire, Hampshire, Berkshire, Wiltshire, Somerset and Gloucestershire.
However, early season trades in this area are likely to kick off at much the same level as a year ago, at about £40/t ex-farm for small bales, which earn a premium of £5-£10/t over large bale prices.
In Lincolnshire, small bale barley straw is currently worth £65-£70/t ex-farm in a mixed farming area for local delivery, although there is very little left on farm.
Hugo Richardson of J * Walter, Lincoln, expects a stronger straw trade, but not a dramatically higher one.
Demand for straw will be strong in the West Country and Welsh borders, says Ed Morgan of Laurence Gould. While this will not mean it will be economic for every arable grower to bale or sell straw, the geographical boundaries for cost-effectiveness are likely to expand this season.
"Farmers are likely to be prepared to travel further for straw, but haulage will be a limiting factor in the Eastern Counties. Square bales will make the most economical use of haulage, although the largest Hesston bales may be too big for easy handling on smaller livestock farms," says Mr Morgan.
"Prices could kick off at more than £40/acre for straw in the swath in the south-west, and £50/t for square bales delivered in that area."
Last season saw winter barley sell in the swath for £74-£148/ha (£30-£60/acre), and winter wheat at £49-£111/ha (£20-£45/acre), says auctioneer Robert Venner, of Greenslade Taylor Hunts Taunton office. With stocks now down to the boards, he expects a strong trade again this summer.
The greatest opportunity will be for those who can bale the straw, or have it baled, and then store it under cover for sales through the winter, says hay and straw merchant Stuart Hickman of Abbott & Co (Wessex).
Merchants are extremely cautious about the prospects for prices. "I dont think it will be worth substantially more than in any other year, possibly £1 or £2/acre more. There have been better outlooks for growers than this year – times when you could say that it will be short," says Mr Hickman.
He stresses the need to treat straw properly. Simply baling and stacking in the field, even if it is sheeted, could be a financial disaster, he warns.
"Quality is king in the trade, and second quality straw is not required. Its a lot of money tied up, but if you have barn storage and the finance to market it through the winter, possibly with the support of a reputable merchant, then the spot trade can be very good. But it is not something to retire on."
Early season sales, at or very soon after harvest, are not good opportunities, says Mr Hickman.
Worries over the rate of restocking after F&M lead Scottish merchants to be more cautious about the value of the next straw crop. *
Straw prices are strengthening on the back of lower cereal sowings and extra use during the foot-and-mouth crisis. But make sure baling and removal will not delay drilling before committing to supply straw from this harvest.
STRAW PROSPECTS
• Stronger demand likely.
• Store for best prices.
• Worth £20-£22/ha in P&K.
• Avoid delaying next crop.
• Typically £40/t ex-farm at harvest for small bales;£5-£10 discount for large bales, with regional variations.