With higher grain prices hitting the headlines, NFU Cymru will use Monmouthshire Show to urge cereal growers not to gamble with the market and risk losing out on much needed revenue.
The Union is stressing to all cereal producers the importance of knowing the quality of their crops before actively marketing what they have produced. For the best result, they should monitor current prices, take account of market analysis and seek out expert advice.
NFU Cymru is also asking growers to draw on their experiences of the 2007 harvest and to consider how best to take advantage of the current spike in prices.
Colin Phillips, NFU Cymru Monmouthshire County Vice Chairman said, "Growers need to respond positively to the current rising market by having a flexible marketing plan in place. The alternative of just taking what’s offered on the spot market for the whole of the year’s production is simply gambling.
"We only need to think back to three years ago when grain prices rose to more than £200 per tonne due to shortages in the wheat market. That year many growers were caught unawares by the rapid changes in price and as a result were unable to receive as much for their crops as they should have. That was particularly disappointing, as prices had been below the cost of production for a long time before the 2007 harvest.
"With the ongoing volatility in global, European and UK grain markets, few can predict where prices will end up, but there will undoubtedly be much needed opportunities for growers to take advantage of this harvest. But to do so, they have to know the quality of their grain, what their grain is truly worth and they also need to consider protecting themselves from price changes."
Heavy rain is being blamed for wiping out the wheat crop in Canada whilst Russia is facing the worst drought in more than a hundred years which has devastated crops both there and in the Ukraine. This is the second time in four years that weather events have led to unprecedented wheat market moves, and clearly demonstrates how finely balanced global supply and demand is.
The county of Monmouthshire is also home to a number of poultry producers. The poultry industry has expanded significantly throughout the whole of Wales in recent years but it is now that producers are realising how such increases in feed costs will simply erode profits.
Tony Burgess, NFU Cymru Poultry Board Chairman said, "Poultry farmers are highly sensitive to fluctuations in the price of wheat. The cost of growing a chicken or producing a dozen eggs is approximately 60% down to the cost of feed, which is typically 60-65% wheat. A sustained rise in wheat prices will have a direct impact on the profitability of poultry farmers in particular. The effect of a £10 per tonne rise in wheat price is approximately three pence on a chicken leaving the farm. This is hugely significant to poultry farmers operating at extremely tight margins."
