WELCOME to 2017, hopefully everybody was lucky enough to enjoy a happy and safe festive season.
As we start the year, it is great to report that harvest is finally winding down here in southern NSW, with less than five per cent of the cropping area left to be stripped.
Canola yields have been down across the region due to the excessively wet conditions, but for most a great oil content result has helped compensate.
Pricing ranged from $555 a tonne early on, down to lows of $525/t later in harvest.
These numbers are on a Port Kembla track level, with growers receiving an additional oil premium on average of about $30/t on top to sweeten the overall return.
The seasonal conditions that dragged canola volumes down actually gave a nice boost to cereals.
Both wheat and barley have yielded strongly, although as a result the protein levels have trended lower with most wheat testing as Australian Premium White (APW1) or Australian Standard White (ASW1) grades and the majority of barley going to feed grade.
Pricing for these grades has traded sideways in a relatively tight band, with a $10/t to $15/t range basically covering the highest price and the lowest during the harvest period.
In the current situation where both Australia and the world at large have plentiful supplies of wheat, where does this leave the farmer trying to eke out a higher price for his wheat?
One option is to carry the grain and hope a supply issue arises in the coming months which causes prices to rise.
In this situation the seller will benefit from the full effect of any price improvement, but conversely also wears the full risk of any downside to the market.
Even if prices remain unchanged, the warehousing or on-farm storage costs still eat into the final result.
Another option is one of the plethora of managed marketing programs available, the most well know example being a grain pool.
Although not wanting to sound like an advertorial, I do believe pools can still have a place in the overall marketing portfolio of the modern farmer.
With a range of payment options, growers can manage their cash flow requirements and still retain exposure to market movements over time.
Granted it will be at a lower level than the first option discussed above, but this also means lower risk. In a tough selling environment, it’s something worth considering.
