The benefits of strategy

 January 2014

During my time as a farm manager, I always found that the two weeks before Christmas was a good time to relax and reflect on the season past – drilling is finished, stock are all housed and the festive season staff duty rota is sorted – strange how I always seemed to pull the New Year stint!

First task was always to look at how the crops had performed against budget, and if my costs of production were adequately covered by the market. With the bulk of my crops fed on farm, I took the simple option and sold the remainder through a co-operative pool – I was always satisfied with the overall average achieved, and it meant my time wasn’t tied up tracking markets. It was a marketing strategy that worked for me and I stuck to it.

The importance of having a marketing strategy struck home at a recent Arable Business Group meeting, where we were looking over the harvest 2013 results. The figure with the largest variation was price, with a spread of £25/t for wheat and £75/t for OSR. When you equate this to the average yield, it works out at £245/ha and £285/ha respectively. What other factor can have this impact on return? But not one of the group had a clear marketing strategy……

The benefit of having a strategy is to reduce your business exposure to risk: by selling forward, using futures, covering with options and so on, you are reducing the risk of getting caught at the bottom of a volatile market with no place to go. Look on it as insurance – car insurance reduces your risk of a large repair bill, whereas a good marketing strategy reduces your risk of hitting the bottom price.

As well as looking back at 2013, this is a good time to think about next season, and particularly which varieties to watch out for. The new Recommended Lists for 2014/15 are now available online, and will be distributed in hard copy in February. Although no outstanding varieties have been added, there are a few worth keeping an eye on. For Scotland in particular, the following are worth noting

  • Incentive W OSR is similar to Anastasia, and is high yielding with good resistance to light leaf spot.
  • Cavalier is a new high yielding winter barley with good specific weight and straw strength. There are four new spring varieties on the list that look promising, with a wide variety of agronomic characteristics, but unfortunately none is approved for malting.
  • Shada is a new spring feed variety with a considerable yield improvement over the current popular feed varieties, and would be worth watching.
  • Panacea and Twister are new Group 4 soft wheats that have produced high yields in Scottish trials and, along with Leeds, will be worth thinking about for autumn 2014.

Before signing off I must mention the excellent launch events in December for the latest additions to the AHDB Cereals & Oilseeds Monitor Farms family. The Mathesons in Black Isle and the Milnes in Fife both received enthusiastic support from their local farming communities, and I look forward to working with all concerned through 2014 and beyond.

Gavin Dick - Scotland

Gavin Dick - Scotland

AHDB Cereals & Oilseeds Manager (Scotland). Previously a business specialist with SAC, working to broaden farmers’ business management skills.