Taking a more holistic look at the global grain market will help UK growers make more informed decisions in their own businesses. Alex Black reports from The CropTec Show
Looking closely at costs and understanding how grain marketing works were areas for farmers to focus on as they prepare for big changes in the industry.
Having a thorough knowledge of costs and how the business stacks up against others would become even more important as subsidy payments were reduced, according to Strutt and Parker’s Sebastian Murray.
Speaking at The CropTec Show in Peterborough last week, Mr Murray said farmers were being proactive.
“They are aware there are big changes coming and now is the time to see how you stack up. Then you can start putting plans in place,” he said.
Data was key, with farmers needing to understand the costs of delivering public goods, to see if new schemes were worthwhile.
He added they had been carrying out a number of machinery and labour reviews.
“With the Basic Payment Scheme going, see if you can run with less. It is about looking at other options, comparing machinery and labour costs with contractors’ charges per hectare," said Mr Murray.
“If you are not more efficient, are you better contracting that out?”
And understanding how to sell was as important as quality and high yields.
James Bolesworth, grain analyst at CRM AgriCommodities, said knowing what drives the markets could give farmers a better idea of where prices will go and the best time to sell.
“If you do not sell that crop well, you might as well be producing a crop with far lower yields,” he said.
And younger farmers were particularly interested in more strategic and professional approaches.
Mr Bolesworth added there was ’a lot of noise’ in the market, but it was important to recognise which factors weighed on UK wheat prices.
At the moment, he was watching what the effects may be of the drought in Europe and monitoring what was happening in big importing nations, giving the example of where they would go when the Black Sea exports have to slow.
“The obvious answer is the US. That would mean world prices have to start rising,” he said.
He added political instability was also on the radar, with the current situation in Ukraine and Russia potentially affecting their exports or currency.