Behave like speculators, consultant urges farmers

FARMERS should be buying and selling like speculators, according to crops market consultant Alastair Dickie.

The former director of crop marketing for the Home Grown Cereals Authority said farm-related businesses like oilseed presses and flour mills would trade inputs and outputs every day to make sure they made a profit overall.

Farmers should be watching the futures markets and checking out potential buyers even before they bought seed, then badgering suppliers to give them advance deals on inputs and choosing their moments to sell their harvests in advance.

Mr Dickie was speaking in Northallerton, this week, at the opening of a touring lecture session with the title Volatile Markets: What Can I Do?, organised by supplies and services provider Farmway. He writes a newsletter on markets for Farmway customers.

A farmer asked him: "If you are that good at futures, is there any point in farming?"

And Mr Dickie conceded that making money out of the markets was a full-time job. But farmers should be more aware of the way it all worked, he said. If they were, they would take their Single Farm Payments in euros instead of waiting for them to be converted into pounds – "because then you have a forward receivable you can sell when you like". But most did not.

Andrew Ward, a successful arable farmer near Lincoln, said his top tip was to use a nitrogen minimisation service. Each 100 soil test would be more than repaid. But farmers had to have the nerve to go with the readings. They might get lower than maximum yields, but the saving would make up for that.

Mr Ward produced a lot of figures in support of minimum tilling – or "intelligent cultivation" as he called it.

He gave up ploughing in 2002, in favour of more precise soil preparation, using Simba machinery. Better drainage was his main reason and he also made a point of keeping his dykes clear. He preferred to get his stewardship points from field margins rather than overgrown drains.

Preparation for first wheat crops used to cost him 186 minutes and 144 a hectare and now cost 67 minutes and 93; preparing heavy soil for oilseed rape used to cost 152 minutes and 109 a hectare and that had been reduced to 53 minutes and 65. Medium soil prepping for sugar beet was down from 189 minutes and 148 a hectare to 97 minutes and 127. And all yields were up.

He could be precise about his figures because he ran a detailed cost analysis of every machine and recorded the fuel costs of every tool.

Some contracting out was probably needed to get the best out of each machine – "and unless you know what it costs, how do you know what to charge?" he asked. He also said he costed complete rotations, because each individual crop impacted on the next. Finally, he warned against selling straw without working out its value, chopped, as a fertiliser – currently around 110 a hectare, he reckoned. Mr Ward offers consultancy through Ward Cultivation Solutions – wcs-farming.co.uk/

Danny Baker, business development manager of plant breeder Monsanto, acknowledged that many farmers planted Farm Saved Seed. He warned that with oilseed rape, the seed would be compliant with industry standards for only one generation after the bought-in planting at best. And seeds saved from hybrid plants simply would not work properly – the genetics of all the plants would be different.

He also encouraged farmers to sign a pro-GM petition at scimac.org.uk/petition.php/

CW 29/1/11