Information the key to grains success in 2010
Author: Gregor Heard
Source: http://fw.farmonline.com.au
WITH a deregulated grains market, farmers are increasingly realising the vital importance of sound market intelligence when making marketing decisions.
If the first year of deregulation was the year of on-farm storage, the 2009 season saw a huge increase in the number of brokers and analysts providing that crucial information to growers.
The trend is only likely to increase, as farmers seek to find a marketing edge by assessing the micro and macro trends emerging within the market.
From supply and demand balance sheets within key domestic use regions of Australia, to a snapshot of the international situation, many farmers have decided it is worth the price of hiring an expert in these areas.
Contacts are also crucial, and middlemen, linking up producers with reliable domestic end-use customers, are also regarded as being worth their cut.
The other major growth area in 2009 was specialised marketing products, from Elders Toepfer’s on-farm storage accreditation program, to GrainCorp’s initiative to link warehoused grain with on-line trading house Clear Commodities, to the move by several bulk handlers to offer a warehouse cashflow option.
Marketers have realised the myriad of different requirements from customers in different zones and with different financial requirements and are working to fill the gaps, with a massive suite of products and tools flooding the market.
Look out for even more niche marketing products to hit the market next season.
Internationally, the market looks as tough as ever to predict.
On one side, there looks to be positive news, with a swing out of wheat in the United States, and the continued bullishness for soft commodities from the investment funds, but there is also the spectre of low cost grain out of the Black Sea region.
With its fertile soils and low cost structures, the Black Sea shapes as one of the key competitors for Australian grain.
While Australia continues to fill the quality sector of the market, there is only so much of a premium to the Black Sea product that the market will bear before the cheaper Black Sea product becomes attractive.
The freight advantage from countries such as the Ukraine into key Australian markets in the Middle East is also a concern.
Locally, expect plantings to remain stable to slightly lower next year.
Mixed farmers in high rainfall zones in Victoria, South Australia and Western Australia have gone extensively into cropping in recent years, lured by high prices and dry years that made cropping possible, but a combination of a genuine wet winter, low grain prices and harvest downgrading may lead farmers in these areas to reconsider planting area.
On the flip side, the extensive moisture bank put under NSW’s central and north-west cropping zones may encourage farmers in marginal cropping areas there to have a crack next year.
Wheat plantings may finally be under the pump somewhat.
Farmers impacted by drought have been looking for the lowest risk crop for some years now, and wheat has filled that category, but the agronomists may finally put their foot down and urge farmers to implement their rotational crops in order to cut down on problem weeds and limit the risk of root-borne disease.
With wheat prices depressed, many growers may decide 2010 is the year to bite the bullet and go with the relevant break crops, especially in canola-growing regions, with canola prices holding up relatively higher than the rest of the grains industry.
The entire article on: http://fw.farmonline.com.au/news/nationalrural/grains-and-cropping/grains/information-the-key-to-grains-success-in-2010/1715300.aspx?storypage=2
Posted: 7 January 2010 under Agri solutions, Agribusiness worldwide.
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