Posted 4 February 2011
By Harper Forum reporter, Charlotte Harley.
The week’s Harper Forum welcomed Jonathan Hoyland, grain trader for Frontier, the UK's leading crop inputs and grain marketing business.
Mr Hoyland opened the Forum by providing a glimpse of the market of malting barley, and other grains, and to demonstrate the potential in using such market research.
He explained the critical factors that affect the market and value of crops;
• Nutritional substation – cheaper to use barley as wheat prices double in livestock feed?
• Feed grain complex – comparative prices of grains, and supply available.
• Consumer cover
• Political/Access to the market – export tariffs, export ban,
• Crops in the ground – weather effects
• Elastic or Inelastic demand
Mr Hoyland then explained what the grain market is and considered the key concepts of supply and demand.
The supply picture – growing the crop, yields and percentage of farmers’ crop sold.
The demand picture- for instance, what happens if the number of 18-35 years olds drops? So too does beer intake. Quality surplus and deficits will affect the aspects of demand and inturn, prices.
In consideration of this, the job of traders/marketers is the analysis of the affects these changes will make and apply these to different scenarios to discover the possible problems ahead to producer and purchasers.
For consideration, Mr Hoyland gave these guidelines:
• Market Volatility is here to stay so be able to review budgets and adapt to price changes.
• At any one point there maybe 3-5 factors affecting the market so don’t worry about detail but the concept of the situation.
• Changes will come in the form of fertiliser changes, technology advancement, legislation and through population and demographic reshaping.
These all mean that arable farming in the UK is an interesting place to be. Proximity to the worlds market can lead to exciting new horizons and that students are lucky in be part of agriculture - something that is becoming more and more important to the world.
During questioning, the speaker was asked ‘what as students should we be asking of the market?’ In answer, Mr Hoyland advised to be inquisitive of the changes, but most importantly to not be wrapped up in detail.
There is no Harper Forum next week due to the Student Union elections, but it will reconvene on Feb 17 with a speaker from the CLA.