Better returns from Budgeting: Grain market daily

• UK feed wheat futures (May-24) closed at £179.35/t yesterday, down £3.00/t from Monday’s close. New crop futures (Nov-24) closed at £202.45/t, down £2.90/t over the same period.
• Rains in southern Russia are expected over the coming week, supressing concerns regarding growing conditions in the region due to abnormal dryness. However, drought concerns in the southern US Plains are limiting losses in wheat markets. The May-24 Chicago wheat futures contract is due to expire on 14 May 2024, spurring some profit-taking which also weighed on global prices.
• Paris rapeseed futures (Nov-24) closed at €465.75/t yesterday, down €6.00/t from Monday’s close.
• Paris rapeseed futures fell under pressure yesterday due to weakness in the vegetable oils complex. Falling demand weighed on the oilseed complex as rival oilseeds compete for market share. Chicago soyabeans futures (May-24) fell $5.60/t yesterday to close at $420.86/t.

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Farmbench is an online benchmarking tool that allows you to compare your farm to similar businesses. It helps you to identify where you can improve efficiency and increase profits. Farmbench is a free tool for our levy payers. By signing up to Farmbench, you can identify your business strengths and weaknesses.

Across the UK we have over 40 active Arable Business Groups, the initial focus of any group meeting is understanding cost of production at enterprise level. We use Farmbench with these groups to discuss how the crops in the rotation are contributing to the overall profitability of the business.

There are several groups across the UK that have been operating for over 10 years. These groups are legacy groups from our Monitor Farm Programme that have continued after the programme finished on that farm.

Some of the longer running groups have added a budgeting meeting to their calendar of meetings. The format for these meetings included reflecting on the year past, but more importantly focusing on the next harvest and what challenges that may bring. With so many factors out of the growers’ control, getting to grips with production costs and understanding break-even points is more important than ever.

An item on the agenda for the 2024 budget meeting was ‘Comforts vs Concerns’. This encouraged group members to look at the budget figures they had added to Farmbench in a report format and identify what numbers they felt comfortable with and what numbers they were concerned about for the 2024 crop.

Comfortable numbers for group members included “crop protection costs” due to forward buying and “grain price” for those that had sold forward or secured a contract for specific crops e.g. HEAR OSR.

Concerns for the group members were similar across the board. These included “uncertainty in the fertiliser market” and the “ever increasing cost of machinery, therefore impacting on annual machinery depreciation costs”. Group discussions following the conversations around the concerns of rising costs were to consider the application rates and timings of fertiliser and to look at the costs of using a contractor and machinery sharing versus owning your own machinery.

Analysing your cost of production and knowing what it costs to grow each crop in your rotation helps when marketing your crop. It is difficult to know what a ‘good sale price’ is without knowing the cost of production per tonne.

We are always recruiting for new members to join our Arable Business Groups across the UK. There are many benefits to being part of a group, these include:

• Learn from and alongside your peers
• Personal development
• Understand costs of production
• Investigate pricing strategies
• Focus on issues that affect members’ businesses
• Make efficient use of industry experts

For information on your local group, contact our team of Farmbench Managers.

Useful links

Register on Farmbench

Contact your Farmbench Manager

Arable Business Groups

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