Beat price volatility ‘by selling grain forward’

GRAIN growers have been advised to sell grain forward through their merchant or co-op in order to get through expected “wild” price volatility in the next few years.

“While it is probably not practical for Irish growers to take part directly in futures markets, it is very easy for them to follow movements and price trends and, as such, sell grain forward via their merchant or co-op,” said R&H Hall grain trader John Bergin.

Since 2007, world wheat prices have slumped from €300 to €100 per tonne.

In an article in AIB’s Agri Matters bulletin, Mr Bergin said Irish growers must know their production cost before tackling their price risk exposure.

He advised: “Set a minimum price target, identify the price level at which you are prepared to sell, and you should sell a percentage of your crop when this level is reached.

“Understand and monitor the market so as to take advantage of price shifts in your favour and find a partner to act on your behalf.

“Be fully aware that numerous outside factors will have an impact on grain prices, and be alert to these factors,” advised the grain trader, who said futures trading can protect Irish growers from the extremes of the market place and get them off an expected dramatic price roller-coaster.