Marketing of the 2019 crop and Pool selling.

[Honest john]

This is the Futures price chart plucked from the AHDB web site.
Now what would members expect a harvest pool base price to be for the 2019 crop. I would expect sales to have been made Aug 18 to Aug 19. I feel the price should be in the 145-150 range. Taking £7-8 less than this futures chart.

One of the main players rises above the others in that they are open & publish there results for all to judge.
I feel rightly or wrongly that we are having our legs lifted at times.

In response to this from 2020 onwards I am thinking I will run my own pool. Selling a % per month over a 12 month period pre movement.

Any Thoughts & figures please.

 

[teslacoils]

If it's sub £150 I'd be disappointed.

 

[Clive]

I don’t understand why people use pools - they never seem to report good results

If you want an average price simply divide your tonnage by weeks of movement and price that many tonnes each week

I don’t think pools do anything much smarter than that

 

[chipchap]

Why pay somebody else to market your grain, when it is quite easy to make a hash of it yourself?

 

[teslacoils]

Why pay somebody else to market your grain, when it is quite easy to make a hash of it yourself?

At the moment, it looks like I have made a hash of it. 25 percent in harvest pool and that's it. But who knows what it will be like in a year's time.

 

[Honest john]

I don’t understand why people use pools - they never seem to report good results

If you want an average price simply divide your tonnage by weeks of movement and price that many tonnes each week

I don’t think pools do anything much smarter than that

That’s the whole point of my thread, you don’t need a 100K trader to do that a computer programme can do that for them. And if resent yrs of results is a good guide probably the computer would be better.

I don’t want this thread to turn into Orange V Green V Blue etc but since the Brexit vote they don’t seem to even hit Ave let Alone top 25%.

At least the company that has recently had a name change openly publish there results.

 

[4course]

we put some in a pool wether it be long ,short or harvest then set about trying to beat i.t There are some advantages with the company we use, if its harvest pool will be moved which this year has been worth a lot. If its the long pool there is a possibility of drawing a % of monies early so helping to manage cash flow and the short pool i.e xmas means we dont have to dry everything at harvest as long as we get it below 16.5 in the shed and aerate but still guarantees movement. Then great sport is to be had in trying to beat the trader which over the last years has been about 50/50 with not that much in it other than for a couple of years when it rose dramatically end of season which to be fair if it had not been for the pool wouldnt have had the free grain and this year they tell me the harvest pool is in front but wether it will beat what weve sold time will tell

 

[PSQ]

Maybe I’m just too cynical, but pool selling sounds like asking a dealer to sell your car for whatever price he can get, then giving you whatever money he thinks he can get away with after writing off any other poor trades. And before he writes the cheque he charges you a hefty commission on top for the privilege.

I have sold grain in a pool, once.

 

[4course]

suppose it depends who you use though, we operate a once robbed never use them again policy which is why we dont trade with the multinationals at least not directly and havnt done ever since the year moisture went down from 16 to 15% a year of an early harvest as I recall

 

[B R C]

Apart from their ‘normal’ margin in grain purchases do they charge extra for using a pool? I will never use a pool, I just cannot see the point.

 

[Chae1]

I think its like a lot of thing with farmers. It gives them the chance to blame someone else when they get it wrong. Rather than take responsibility for it themselves.

 

[chipchap]

Pools are a useful tool for farm managers and land agents. If the price achieved is crap, it’s someone else’s fault.

 

[David.]

It only ever seems like a good idea to chuck some in a pool when you begin to suspect the chickens have already flown the coop; the hope being that "they must have sold a huge chunk advantageously forward", and hoping for a ride on their coat tails.
If they had a really good position going, the pool is usually closed by this point in time,

 

[Honest john]

For A grower with a small to moderate total tonnage it’s not easy to hit the top 25% of the market.
Better to place the tonnage with others in a pool.
A bigger grower can effectively run there own pool. With sales every ( week month or 2 month period ) of time.

Also on contract farming it smooths the path between farmer & contractor.

 

[teslacoils]

If it's sub £150 I'd be disappointed.

I am led to believe I should prepare my Hat Of Disappointment.

 

[Widgetone]

When prices are low like now some farms appreciate Pools, someone else has the role of marketing it.
In the good years, nobody needs them.

 

[Honest john]

I am led to believe I should prepare my Hat Of Disappointment.

See the graph in my OP. It should not be that way.

 

[4course]

the difficult decision as most merchants offer various pools i.e harvest, xmas or late is choosing which pool to commit some grain to, this year last jan we chose the harvest pool for some ,seems to have been a good choice its gone allowing more storage space enabling us to keep combining dry grain, its price will be well above spot and come the first week of october will have cash. We also have a tranch on the mid pool commited before xmas looks like that will do above the average , some would say we could have done it ourselves and we do with the other 3/5ths but ive only had two decisions to make not lots and marketing our free grain is still possible Weve got some well sold for nov but ive also got a couple of load sold to make space earlier this month not so good, will be interesting to see if the average of these two lots beats the mid pool

 

[Honest john]

the difficult decision as most merchants offer various pools i.e harvest, xmas or late is choosing which pool to commit some grain to, this year last jan we chose the harvest pool for some ,seems to have been a good choice its gone allowing more storage space enabling us to keep combining dry grain, its price will be well above spot and come the first week of october will have cash. We also have a tranch on the mid pool commited before xmas looks like that will do above the average , some would say we could have done it ourselves and we do with the other 3/5ths but ive only had two decisions to make not lots and marketing our free grain is still possible Weve got some well sold for nov but ive also got a couple of load sold to make space earlier this month not so good, will be interesting to see if the average of these two lots beats the mid pool

So how much for your harvest pool do you think ?

 

[Two Tone]

I don’t understand why people use pools - they never seem to report good results

If you want an average price simply divide your tonnage by weeks of movement and price that many tonnes each week

I don’t think pools do anything much smarter than that

There are a couple or more, of good reasons for using pools:
If you are a Farm Manager or Contract farming somebody else’s grain, you cannot be blamed for selling the grain too cheap at the wrong time.
The pool managers are far more expert at knowing when to make sales that we are.
You can take money for cash-flow purposes before the grain has left the farm.

Even if as a farmer in your own right, fully responsible for selling your grain, you aren’t worried about the above, I still think pools can be used to advantage:
Divide your grain into roughly 3 lots.
Sell the 1st third of your grain early for cash-flow and/or lack of storage needs.
Place a 2nd third into a pool. This can not only help cash-flow if an early interim payment is taken, but could be used to finance fertiliser purchases when the deals are good.
Sell your last third as and when you think it is the best time or price to do so. What is more, this last third could be more or less than a third, depending whether your yields were better or worse than you expected before harvest started. It also reduces your risk of being put in default in a low yielding year, when you don’t have enough grain to cover your contacts.

This way, you have pretty much covered all the angles, have secured a reasonably fair price for a large part of your grain and have at least taken some risk with the rest of it.