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Union Urges Members to Grow for the Market

With spring planting weeks away, NFU Scotland is encouraging its members to only consider growing those crops that they believe they can sell profitably this coming harvest. 

The huge volatility experienced in the 2009 season saw grain prices tumble at the same time as input prices, such as fertiliser, increased and the Union is keen that arable farmers and the trade learn from last year’s pain and better manage what growers produce to meet real market demand.

The Union had a positive meeting with the Malting Association of Great Britain (MAGB) this week to discuss the potential market for spring barley this harvest.   It has also welcomed the release of a number of contracts in Scotland for malting barley – the main ingredient in Scotch whisky production - that give some opportunity for growers to better manage risk over the coming seasons.

Speaking after the MAGB meeting, NFU Scotland Combinable Crops Committee Chairman, John Picken said:

“Unfortunately, as farmers, we need to learn from last year’s financial pain and focus on growing crops that we are actually likely to sell at a viable price.  No one could have predicted that the price for cereals would have almost halved just as costs doubled.   As a result, this is no year for taking risks and if the business lost money on growing crops in 2009, then for goodness sake do all you can to ensure that you don’t lose money again in 2010!

“There are contracts out there at the moment that could help growers take a  better account of the risk associated with growing cereals and that is a welcome development.  These are contracts that have a fixed premium based on wheat futures. We have been lobbying for several years to have these available to growers and we welcome the progress that has been made on this.

“Credit is due to those buyers behind these contracts as they are looking positively at providing a longer-term signal and, hopefully, some stability to Scottish growers.

“To further manage that risk, we also need to be offered input prices that reflect our expected returns and crop sales prices.  If merchants want us to take up forward positions on malting barley contracts for two or three seasons then they could also be coming out with forward prices for fertiliser for the same time period.  Growers should not be put in the situation again where we have fertiliser prices rising 100 percent and our crop prices falling significantly.”

Ends

 

 

Date Published:

News Article No.: 13/10


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