Marketing tools can lift growers' take-home pay
GroundCover™ Issue: 48
By Patricia Howard
The closure late last year of Netco, the peak Australian body for primary production cooperatives, was seen by some as evidence that cooperatives no longer work in Australia.
This, along with the demise of state-run marketing boards within so many agricultural industries, means farmers now face increased volatility in the prices being offered for their crops.
So much so that there is a question mark over whether or not farmers can continue to simply accept pool prices and still make a reasonable living from a marketplace that is in the throes of de-regulating and consolidating.
It is for this reason that Brett Stevenson, general manager of the rural consulting group AgRisk Management, believes growers can benefit from learning new and more effective ways of marketing their own crops.
To help growers have more influence over the prices they receive, AgRisk Management developed Market Check – Grain, a series of marketing workshops, weekly reports and daily emails specially designed for grain growers.
The workshops started in 1995 and more than 3000 growers across Australia have since been involved in the program (www.marketcheck.com.au).
Photo: A Goondiwindi farmer group
with AgRisk Management’s Brett Stevenson (right) and Peta Moore,
coordinator of the Goondiwindi Market Check group.
The program provides growers with ongoing independent help on how they might better market their crops, and it offers professional support and continued access to a range of marketing tools and products. This extends from basic tuition in managing farm risk, crop monitoring and hedging structures, through to the design and execution of a tailored marketing plan.
Kevin Vivian, a wheat and sheep farmer from Managatang in northern Victoria, says the workshops had given him the skill to lock in prices higher than those otherwise offered.
“Last year, Market Check predicted the price slide in wheat. It told us to sell for a cash price and to enter into these cash contracts before we harvested.
We gained about $80 a tonne or almost $70,000 extra for the crop,” he says.
“Each seminar takes about three hours, so it does involve a time commitment. You also have to learn to act when the market tells you, not just when you’re thinking about selling your crop at the end of the season.”
Mr Vivian believes the workshops provide valuable skills, and that with the internet, can help growers become much more proactive in marketing their own crops and achieving better returns.
“I usually spend about an hour on the computer first thing every morning. The futures market is particularly important because that is basically where prices are set, and so understanding and monitoring the futures market is a key aspect.”
Mr Vivian says he became interested in the futures market about five years ago and is now convinced it has helped him lift his profit base.
Brett Stevenson says income volatility is a fact of life for dryland farming in Australia, and the key for all growers is learning how to manage this volatility and the associated risks: “The use of futures contracts to lock in prices is one way.”
Market Check – Grain offers a series of marketing workshops, including pre-harvest workshops that focus on harvest finance and ways to use harvest information and marketing tools to improve the terms for selling a crop.
Mr Stevenson says that learning about futures trading is a part of this overall process: “In itself, futures trading may not ensure a better price, but it is definitely part of the mix of ensuring you market your crop more effectively.”
For more information:
Brett Stevenson, AgRisk Management Pty Ltd, PO Box 1050, Pymble Business Centre, NSW 2073