The future has become predictably unpredictable. And beset by extremes.
As I write this, the USA and Israel’s attack on Iran has entered the third day. This rupture in the Middle East will ripple out to the wider world. Including arable farm businesses. Oil prices will likely rise for a while, pushing up the price of fertiliser. On top of that, other affected Middle Eastern countries will change supply and demand, and so grain prices.
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Back in Scotland, an extremely dry summer in the East was been followed by an extremely wet winter, especially in the North-East. These extremes should balance out groundwater levels. Hopefully. Extremely low rainfall and soil moisture levels impacted screenings, marketable yield, and profits, last year.
Amidst this uncertainty some things are certain. There is far too much barley sitting in farmers’, merchants’, and maltsters’ sheds. The supply chain needs to shift grain, and farm businesses should prepare for another winter of grain storage. Otherwise we will see low post-harvest barley prices.
In late February I was at a North-East NFUS meeting at Aberdeen Port with members, hauliers, and merchants. We are keen their new South Harbour is used to ship grain from Aberdeenshire to North African feed markets. These might not pay a premium price, but will at least clear grain from sheds.
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And closer to home, if you have SQC farm assurance, you should consider ticking the ‘long-term storage’ box. The 2025 derogations can’t be counted on. In an uncertain world, the ability to effectively store grain for the longer-term can be a good way of managing market volatility.
Thankfully we have managed to retain direct payments to buffer against volatility. And we will continue to influence policymakers and the supply chain for policies that support Scottish agriculture in the predictably unpredictable future.