Are we operating in the right markets?

A very delayed blog post from Shropshire.  It is now well over a month since we had our first Monitor Farm Open Day at Howle Manor, just north of Newport in Shropshire, and not many days until we will be welcoming people back to the farm for our second. Although we are right at the start of this journey, already it has been an interesting process to be part of and already I can see that I have benefited personally from being part of it. Whether I can translate that into benefit for the farm in the long term is down to me.

The first, and perhaps most difficult, decision for a monitor farmer to make is what they and the group want to focus on over their three years on the programme. Our business is currently in transition between the generations, as my father starts to take more of an advisory back seat and I move into the primary decision making role and for this reason I knew that I had to focus on big, strategic issues facing the business; we have an opportunity given to us by the Monitor Farms programme to review whether we are using our land resource in the most efficient, most environmental, most profitable ways, and we also have an opportunity to re-assess which of those factors we consider to be the most important. I do not think that we will get the most out of this programme if we simply accept our rotation as it is now and focus exclusively on decreasing fixed costs through investing in efficiency, or reviewing our variable costs compared to others, or looking at ways to incrementally increase yields. All of those things are an important element of a farmer’s everyday work, and chances to improve in any of these areas should be taken. However, first of all it is more important to assess whether we are operating in the right markets, and whether our analysis of what the ‘right’ markets are is accurate.

Our next meeting in February will look at the feed wheat market, which makes up 50% of our rotation. In the west of England, we have traditionally been surrounded by a healthy feed wheat market and the rotation on our farm has been based around it for many years, but is this a robust business model for the next 10, 20, 30 years? Hardly any of our cereal crops are grown on contract, so our only protection against the volatility of the global market is our ability to forward sell crops at the correct time, a skill which seems to be even more volatile than the markets we operate in. We are hoping to have an AHDB Cereals & Oilseeds Market Analyst come to talk to us about the short, medium and long term volatility prospects for the feed wheat market and to have an Andersons consultant discuss the future prospects for cost of production figures on farm. We will also make our first steps towards a group benchmarking exercise. Once we have verified our costs of production, once we have a better idea of how quickly those production figures are likely to rise in the future, once we can estimate how many weeks in a year that cost of production figure will be higher than the achievable sale price of a tonne of feed wheat, I wonder how much longer feed wheat will remain as the basis of our rotation.

This is what I hope the Monitor Farms Programme will help me decide.

SamWatsonJones

SamWatsonJones

Sam Watson-Jones is a fourth-generation farmer growing feed wheat, OSR, oats and potatoes on a 485ha farm near Newport, Shropshire. The farm sells primarily to local grain merchants and Sam also has 180,000 broiler chickens. Sam has started sharing machinery for the potato side of the business and is interested in how he can collaborate with other arable farmers to achieve more on his enterprise.

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