Death and taxes; the only certainties in life. Trying to predict anything else can sometimes seem infuriating, just ask a farmer how much he worries about the weather. So whilst no one can predict the future, one can still be profitable if they know their market and how to operate in it. Therefore AF’s Next Generation should be well on their way to understanding how to ensure profit after they were given a masterclass in grain markets at Camgrain in Balsham, Cambridgeshire.
Richard Whitlock kicked off proceedings by taking delegates through an extensive and highly informed breakdown of all things to do with trading on the commodities market, specifically grain. Beginning with basic elements like what to look out for in the various contracts, Richard then went into more detailed areas such as market forces and what types of trading there are, including futures and options. Richard highlighted the need to stay competitive considering there was competition not only from abroad but also from funds who will be affecting the price of grain despite having no intention of ever taking delivery of stock. In what can be a volatile market, Richard stressed that by marrying knowledge with rational thinking one can make sensible marketing decisions.
Simon Ingle underlined Richard’s plea to know your market extensively by taking delegates through how world grain markets effect UK farming. Supply and demand is the most fundamental impact on price so world events are forever impacting on the market. For instance, whilst the drought in the US in 2012 saw the price of wheat rise dramatically as supply dropped, the westernisation of the Chinese diet has seen a 3rd consecutive record level of production and, as a result, a drop in the price of wheat. So with international markets impacting on the UK market, Simon went on to explain how the upcoming EU referendum is having an impact as well. The one thing the city doesn’t like is uncertainty, so the upcoming referendum has added to the impact on the foreign exchange which has seen the sterling weaken against the Euro. Such factors show how the UK is just one player is an international and fiercely competitive market.
All this tied in nicely with Richard Self’s talk on apprenticeships being the future for farming as he explained how low prices and increased competition are making for volatile markets. This, he stated, will lead to agri-tech becoming the heart of future success as we will look to produce more but reduce our impact on the environment as the world’s population continues to grow. Therefore, as agriculture moves forward a different skill set will be needed which can be introduced and developed through apprenticeships. The Government feels we are losing competitiveness through a lack of skills and therefore wants to triple apprenticeships in food and farming. This increase in investment should in turn see the employer “seeing” the value of their investment in apprentices as they reap the benefits of introducing and developing new and cutting edge technology.
So whilst AF’s Next Generation won’t be able to give you the winner of the Grand National, if they marry the extensive knowledge they picked up on their visit with rational, common sense thinking, they should be able to negotiate the volatile grain markets to their benefit.