Put more into selling your grain, or go bust
Put more into selling your grain, or go bust
FARMERS should concentrate less on technical performance and more on pricing and marketing if they are to stay in business.
That was the stark message given at the conference by Commodity and Finance Manage-ments Alistair Dickie.
Unlike the 60% of time spent on planning crop type and husbandry dates, farmers only spent about 20% of their time on marketing grain. And this, he said, was far too little, considering the huge difference between a good and bad decision.
Relative prosperity and high subsidy levels had meant this was a discipline farmers had not traditionally needed. But that had changed. "Youre on your own in the marketplace now, and its a dangerous, volatile one.
"Farmers have to develop these marketing skills or they will fade away, along with the corner shop and the daily milkman," he warned.
Mr Dickie highlighted futures and options as a useful means of reducing risk. He likened them to a form of insurance.
"Too many farmers only focus on the costs of such measures. If you only focused on cost, you wouldnt use any fertiliser or spray. Options give you the right to be wrong."
Although such risk management measures had widespread potential benefits, they were probably most useful for the farmer who was heavily dependent on cereals, receiving perhaps more than 60% of total revenue from this source, he suggested.