Care needed over crop commitments as dry spell continues

Farmers should take care with their forward crop commitments as the spring remains very dry through to the second half of April, the NFU said today.

There was a similar dry spell during the spring and summer of 2010 which, the NFU says, had an effect on yields particularly where soils did not hold enough moisture to see all crops through to maturity.

For a number of arable farmers, particularly those who had committed to grain pools or physical sales contracted forward, the disappointment of lower than hoped for yields at harvest was compounded by demands from merchants and cooperatives to fill committed tonnage, in line with contracts.

Grain traders consistently advise that when a shortfall against committed or contracted tonnage is anticipated, discussing options as early as possible makes it far easier to work out a mutually acceptable deal between the parties.

NFU chief arable adviser Guy Gagen said: "This spring we have recorded some of the driest weather in fifty years. By mid-April our members had been reporting slow and patchy emergence of spring crops and some signs of water stress developing for oilseed rape and some cereal crops.

"Marketing crops forward in a period of volatility can undoubtedly be a good way to help mitigate risk from downward price movements. With 2011 forward prices much higher than anticipated, many arable farmers have already secured tonnage for the 2011 harvest that enable them to improve chances of locking in a profit.

"However, lessons from previous years like 2010 here, and from other countries with much greater yield fluctuations, show us when a deal has been done to secure prices, it is important not to overcommit crop, particularly in a rising market.

"Waiting until movement to discuss a shortfall on tonnage all too often results in the kind of solution that our members are very unhappy with."