HARVEST is the business end of the season. It is the culmination of the year's workout in the paddock.
Being such a critical period financially for all farmers, the run into harvest brings with it a mixed bag of emotions and stresses.
Questions that often emerge include: Do we need that last rainfall event to finish the crops? Have we got the disease burden under control? Did we get a frost?
This year has been largely kind after an initially worrying start, with some exceptions on dryness in certain areas of SA.
Farmers are regularly monitoring crops through this period but we recommend investing some time in the office.
Faced with improved crop potential, every farmer at some stage pre-harvest is guilty of a little blue sky thinking.
Some farmers run simple spreadsheets that enable rapid what-if calculations to be generated.
When you have positive yield potential then farmers will, at some stage, plug in a yield figure that is quite unrealistic only to then rapidly change the figure to a more conservative value.
A farming business is reliant on mother nature and it is clearly not in the bag until it is in the bag. Time and wisdom have taught us that things can still go wrong right up to when the grain gets delivered to the site.
Apart from crop monitoring, family farming businesses historically use this period to have a quick break with the family or prepare for the onslaught of action that is harvest.
A significant part of this period traditionally has centered on servicing equipment or completing that critical repair job to a vital piece of machinery. Time spent on preventative maintenance during the pre-harvest period is often a valuable investment.
A smooth harvest mechanically is not something that should be left to chance.
Just as critical as servicing the machinery and monitoring crops is deciding what to do with marketing crops. The combination of yield and price contribute equally to a business' bottomline.
Most farmers are technically very good at growing crops or get excited about driving that big header, whatever the colour.
But selling, or positioning the crop for sale requires some investment of the farm business manager's time.
Scenario planning is also important in grain marketing. Logically thinking through potential scenarios enables more effective decision making should an event happen. Without this, the combination of stress and fatigue will significantly increase the probability of making a poor decision.
The combination of a larger potential crop means pre-harvest logistics planning is critical. Logistics in deregulated markets play a significant role, as the farmer is faced with many more decisions to make.
Should you deliver to traditional Viterra, Graincorp, Grainflow sites with access to most buyers, or is the local commercial private storage a viable alternative?
Forget the sausage sizzle or the idealism that you need to support local private storage operator. You need to make the best long-term financial decision for your business, which may include a mix of destinations.
Identify who your grain contracts are and confirm that you can transact your contract at that site.
Ascertain who your customer is and take time to understand their requirements. If you are located in an export grain pathway, then your customer is generally the grain buyer who you have sold, or will potentially sell your grain to.
While you are in the heat of harvest, any decision to deliver grain to a site simply to get a quick turnaround may become an expensive decision in the long-run.
We are aware of commercially run private storage with limited buyers operating at that site. This may increase business risk as you are potentially faced with additional throughput storage costs because of the lack of buyers competing to buy your grain.
Smaller receival sites are likely to have less allocated segregations and once full, may close. Strategic sites will become critical for high-volume stock standard grades such as APW wheat.
