February 1, 2018
Building spring crop security with buy-back contracts
Planned increases in the areas of spring crop this season make it more important than ever to produce for secure markets offering price or premium guarantee, growers were advised at the Bishop Burton briefing.
Launching an expanded portfolio of specialist Master Seeds buy-back contracts to boost spring crop production security in 2018, Agrii seed manager, Matt Richardson urged as many producers as possible to make the best use of them to reduce their exposure to markets that may become over-supplied.
“Spring crops have a wider range of markets than most winter crops and there is strong demand for specific qualities in relatively high value markets,” he said. “In many cases, however, this demand is limited to modest volumes by commodity standards. So, as winter bean growers have found to their cost in recent years, apparently attractive returns at planting can become seriously eroded by harvest time.
“Under these circumstances, it makes sense to secure your markets before planting wherever you can. Whether you plan to grow spring barley, oats, peas or linseed this season the buy-backs we have secured for key varieties in partnership with Glencore, GB Seeds and Premium Crops offer an ideal way of doing this.
“We currently have spring malting barley buybacks available for RGT Planet, KWS Irina and new variety, Laureate. These offer premiums of £20-40/t and £15-35/t over a feed base which can be set at any time up to movement for nitrogen specifications of up to 1.65 and 1.85 respectively.
“We have also negotiated premiums of £30-45/t over feed wheat, depending on movement timing, for Superioat naked oats to meet the growing demand for the higher nutrient density crop.”
Like the naked oat contracts, Mr Richardson explained that the Master Seeds linseed buy-backs for Juliet and Emma are ‘produce of an area-based’ so there’s no risk of default. These are available with a mixture of flat rate £350/t and £25/t over OSR pricing mechanisms.
Fixed price contracts of £150- £200/t for blue peas – Daytona, in particular – have also been developed by Agrii to supply growing human consumption markets in China and India.
“Higher yielding modern varieties and improved agronomy based on our latest research adds to the attractiveness of these contracts,” Matt Richardson pointed out. “As does their linkage to top quality Master Seeds seed. Contract volumes are strictly limited, though, so early decisions are essential.”