July 2014: What influences our cereal prices?

I guess by the time this issue of Pig World drops onto door mats, the first of the barleys will have been harvested, particularly in the South. Does an early harvest mean a lower yield? The old adage of longer in bed, heavier in head usually applies to early drilling, so hopefully our crops will fulfill their potential.

Currently cereal growers are getting a taste of what the pig men went through in the past two years, in as much as prices are not where they should be to make it worthwhile. Input costs have soared, and the wet weather has necessitated extra costly sprays. Of course the pig producers had good reason to think along those lines when their price drop coincided with a lift in cereal prices two years ago – typical of the pig cycle.

Coupling the earlier anticipated ripening of our crops (my wheat was 14 days earlier coming into ear than the average of June 12) and bearing in mind August is the wettest month of the year, are we likely to have a wet harvest that will then make it late and possibly cause the grain to sprout? It’s a wonderful life being a farmer!

I often wonder just who decides what the cereal price should be? Is it a group of traders, doing what the bankers appear to have done and organising things in their own favour? New-crop prices have been up and down like a yo-yo, as has oilseed rape.

If there’s a report of a bumper crop in say Australia or America, our prices drop like stone. The next week there might be a report of a forthcoming drought somewhere in the world and the price starts to rise again. I would have thought that it must cost a fortune to transport cereals around the world, so why should that affect our small market?

I’m sure the situation is worse than it was in my youth because communication is so much easier and goods can be moved about on paper. To offset that, the tremendous increase in technology and genetics, feed, housing and training for staff has helped enormously in reducing the cost of production of pig meat by making it more efficient. It appears at times that if a farmer manages to save a penny a kilo on production costs, then the buyers want two pence off.

I’ve heard a lot of comments about the recent Pig Fair. While most were complimentary, the odd one or two suggested that there wasn’t a lot new on the equipment side. I had a different sort of view as there’s always some little thing that helps in some way or other.

I know that over the years our industry has tended to move ahead gradually, and just occasionally something quite substantial comes to our aid. I think if our forefathers could come back and see the industry now, they simply wouldn’t believe how it has developed.

> Yorkshire farmer Sam Walton is a former pig producer and the founding editor of Pig World

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