Reflecting on profit
12 March 2014
The ‘Protecting Your Profit’ workshop in Taunton last week was a victim of the weather but for the opposite reason compared to the last few months – it was too fine and many growers were tackling a backlog of fieldwork. I have to say I had itchy feet too as the Square at Somerset Cricket Club, our venue, was being manicured for the forthcoming season, and there was that soothing sound of the heavy roller chugging up and down.
Back to the workshop, the key messages of the day were:
- It’s vital to know costs of production in order to have the most effective grain marketing strategy.
- Sharing best practice and cooperation at many levels can help reduce costs of production.
- Those with the highest cost of production are the first to start losing money in a falling market and the last to start making money in a rising one.
- While the world grain stocks position has eased, the market is still perilously close to a weather or political event, such as we are experiencing at present with the Ukraine. Volatility has not gone away.
- Is there a clear understanding of the relationship between cash, profit and capital in strategic business planning?
- When making grain marketing decisions, ‘when’ and ‘how’ to take the price matched to business objectives is key.
- Understanding the market and communication within the supply chain is crucial to achieve the best potential price.
- The Grain Marketing Contract is one of the most important documents on the farm.
You can make a start or improve your understanding on one of these points – better communication within the supply chain – by joining one of the Meet the Processor or Exporter events organised by AHDB Cereals & Oilseeds. Find out more and book online via the events page, or contact me if you’ve got a specific question.
In the meantime, enjoy the spring!
Somerset Cricket Club