I would suggest that the pain of going bust by selling at less than the cost of production lasts somewhat longer than missing out on £20/t extra profit....
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- Thread starter Jerry
- Start date
I would suggest that the pain of going bust by selling at less than the cost of production lasts somewhat longer than missing out on £20/t extra profit....
shakerator
Member
- Location
- LINCS
Oh, the irony!
I've sold 20% of the 2018 harvest feed wheat & malting barley already (not recently either). Most is in a minimum price contract pool with half the upside minus hedging costs. The base price is above my budgeted cost of production since I've already priced the fertilser used to grow it, got most of the fuel required to sow & spray it and all the seed.
- You're a farmer
- You're talking about taking a massive "long" position by deciding to plant then not pricing any of it
Budget is the 6 year average farm yield sold used to calculate cost of production per tonne, since cost/acres is mostly known.
He's shorting sterling
Sensible trade IMO
Oh, the irony!
I've sold 20% of the 2018 harvest feed wheat & malting barley already (not recently either). Most is in a minimum price contract pool with half the upside minus hedging costs. The base price is above my budgeted cost of production since I've already priced the fertilser used to grow it, got most of the fuel required to sow & spray it and all the seed.
- You're a farmer
- You're talking about taking a massive "long" position by deciding to plant then not pricing any of it
Budget is the 6 year average farm yield sold used to calculate cost of production per tonne, since cost/acres is mostly known.
That's your position , fair enough if it suits , I'm fairly bullish with cereals presently the only fly is the currency rate which could affect us a bit , saying that it's better with brexit looming to have our present levels to keep us competitive .
True, but the memory of selling below the market lasts longer than the memory of waiting for £200 then selling at £100! That's human nature for you!
He's shorting sterling
Sensible trade IMO
I see the hedge but that's complicating the position unless you fix something.
You've long been wary of currency as a giant ponzi scheme but I agree with Condi - it is still the preferred method of barter these days. If you're trading grain for another tangible good then we're totally fecked anyway so I see little difference - the goods might be gun ammo to keep the looters away from your stores!
Locking in profits above COP makes it harder to go bust in all but truly exeptional years! We've had more bearish/sideways markets in the last 10 years than bullish ones in terms of time duration so the shorter positions have paid better.
Or just develop your own strategy and stick to it, accepting the average over the long term & hoping the market pays over COP to you.
your position is different I believe as you have to answer to your superior/superiors and as for paying to take options isn't this the same as paying all the other parasites in the financial world ,and also many on here still treat farming as a way of life as opposed to a blue chip companyOh, the irony!
I've sold 20% of the 2018 harvest feed wheat & malting barley already (not recently either). Most is in a minimum price contract pool with half the upside minus hedging costs. The base price is above my budgeted cost of production since I've already priced the fertilser used to grow it, got most of the fuel required to sow & spray it and all the seed.
- You're a farmer
- You're talking about taking a massive "long" position by deciding to plant then not pricing any of it
Budget is the 6 year average farm yield sold used to calculate cost of production per tonne, since cost/acres is mostly known.
You're spot on. My superiors prefer to be risk averse and keep to budget as much as possible, accepting that they will miss bull markets but do well in bears. Parasites? There's another thread running thast suggests managers & management companies are parasites too. I'm just happy to see supply and demand working out.
shakerator
Member
- Location
- LINCS
Why?
Because civilisation as we know it will have broken down by then, unless you just prefer to hold grain in lieu of cash.
shakerator
Member
- Location
- LINCS
Nah we won't have cash by then ......
Grain is my store of value my work has created. I prefer this "store of value" to 0.1% interest in a bank before fees and buying power deflated by 6-8% a year.
Bills to pay ? Yes of course liquidate some.
Stocks? No thanks
Land? Tax market
Bonds? Go home!
Gold....see below
Pitchforks ....perhaps ....
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Because grain in store can of course deflate by 100% in a very short space of time if you get bugs, a leak in the roof, or other storage issue.
shakerator
Member
- Location
- LINCS
Because grain in store can of course deflate by 100% in a very short space of time if you get bugs, a leak in the roof, or other storage issue.
Part of my work !
Honest john
Member
- Location
- Fenland
Soooo it's Monday lunch time.
The news is ??
The news is ??
Surely if they were that risk averse you would have more combine capacity!
- Location
- York, N Yorks
Just sold all Spring Barley for malting, November movement @£155/t. Yorkshire. I'm happy enough at that.
Chae1
Member
- Location
- Aberdeenshire
Diageo out with min £160/t spot price today. Don't know about rest of country but a lot of malting barley still in field quality and germination will be gone. Cut our last field for malting yesterday. Large part of it was flat and sprouted. 26% moisture. Only field of laureate.
Sandy
Member
- Location
- Aberdeenshire
We're still scraping malting grade with new cut crop.
If economy goes that way I would invest in a fence a gun and lots of ammo so you can keep hold of your grain !