Selling cereals used to be the easier part of grain production, with challenges in the field being more significant for the farmer but David Waite, national seed manager for Frontier Agriculture suggested there was now more to selling grain than growing it.
Mr Waite said in Edinburgh that the volatility in the grain market in recent years was now a regular feature of the world grain market. with a flood here or a drought in another cereal-growing area being sufficient to move the market.
“Anything can now trigger a price spike,” he claimed, with markets now very sensitive to the minor changes in supplies or demand. He instanced the £5 to £6 shift in the market 10 days ago being down to differing positions on the Russian market.
The secret for producers was managing the risk factor and part of that philosophy would, he said, be to sell “little and often” whenever prices reached a point where costs of production were covered plus a profit margin.
Waite predicted there would be a further increase in the number of barley contracts linked to the future price of wheat as this system gave flexibility on delivery to both buyers and sellers.
Earlier he had warned of a looming problem for cereal growers as there was now real concern in the trade over the shortage of hauliers accredited to deliver fertiliser.
There was still a large tonnage of nitrogenous fertiliser to shift on to farms before the spring and it would be all down to timing.
“If we can get a big delivery in January and February, then it might be all right but, if it does not go out on to farms in that time, the infrastructure is not there to put it out later.”
There was no problem, he stressed, with the availability of fertiliser, only in actually getting it on to farms.
He did not think farmers’ cash-flow problems were a major factor in the delayed delivery as many firms operated extended payment schemes.
“Up until now it is more likely that some farmers feared the price would come down after they bought but now the balance is moving towards ensuring it is on the farm before it is needed.”
Mr Waite was speaking at the launch of a number of new cereal varieties by RAGT, who are one of the big players in the European plant breeding industry, with an annual turnover of more than £600 million.