GRAIN marketing can be daunting for growers, with price volatility and a plethora of potential game-changing factors popping up at any time, but industry leaders have come together to help bolster SA growers' decision-making toolbox.
Better informed farmers make improved marketing decisions, Thomas Elder Markets lead grains analyst Andrew Whitelaw says.
"Graingrowers have taken the initiative to skill up but it's a continually changing environment," he said.
So, a series of practical Grain Producers SA workshops are being held across the state this month to help farmers navigate through the "minefield" of markets and decision-making processes.
Mr Whitelaw said it was crucial for growers to understand that the largest driver of grain market price fluctuations was simply supply and demand.
"An example is, if South and North America or the Black Sea region are having a bumper season, then prices decrease," he said.
But, more recently, the grain industry has seen political intervention and trade issues impact global grain movements.
"How to make marketing strategies based around when the market is changing because of things like this is important," Mr Whitelaw said.
This is an interesting time for agriculture, Mr Whitelaw says, with China in particular securing a lot of product, including grain.
"A few grain market powerhouses are changing what's happening at the moment, such as Russia, which will not produce as much grain this year, as it has in previous years," he said.
"Political issues including Russia's wheat export tax rise and trade issues since the pandemic have also changed how farmers can market their grain, too."
Since most of Australia's graingrowing regions recorded a better than average harvest for 2020-21, increased knowledge of what's driving price changes was beneficial, Mr Whitelaw said.
"Having a plan in place before harvest is paramount to making informed decisions. Farmers need to decide whether they will forward sell or take a cash price - either can be beneficial, depending on the season and market drivers," he said.
But there were no golden rules in place for growers that worked year in, year out, Mr Whitelaw said and this year, it was important for growers to understand there was "plenty at play".
"If the price is high, sell as much as you can but if it is low, make strategies around that. That involves knowing what's happening around the globe," he said.
POTENTIAL TRADE EXPANSION AHEAD
MONITORING the local grain market on a regular basis is crucial to access new and existing markets efficiently, according to market analyst Andrew Whitelaw.
Mr Whitelaw said comparing grain prices across the past decade or so, it had shown that the most price volatility was between May and August.
"The rest of the world is harvesting its grain throughout that period. If there are crop issues or a storm or drought, that information will change the market," he said.
New markets within Asia have also become more accessible, Mr Whitelaw says, with markets in South East Asia, Indonesia and Myanmar emerging as beneficial end-points for growers.
"In the past decade, the amount of wheat to Myanmar has risen from 1 per cent to 3pc," he said.
So how do Australian farmers target these emerging markets? Mr Whitelaw said growers needed market specification awareness.
"Whether it be pesticide and chemical use specifications, it is important these areas are completely understood by growers so a vessel is not rejected," he said.
Mr Whitelaw said one of the largest market drivers in years to come would be increased demand for livestock grain.
He said global demand for protein had risen significantly and this would impact grain prices, as producers look to secure larger amounts of feed.
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Vanessa Binks
I am the Markets Editor and journalist at the Stock Journal. I am based at Nuriootpa in SA's lower north.
I am the Markets Editor and journalist at the Stock Journal. I am based at Nuriootpa in SA's lower north.
