ARABLE INPUTS: FERTILISERS
13
FERTILISER POOLS OFFER MANY BENEFITS As farms start thinking about fertiliser purchases for next season, we outline the advantages of the Fram Farmers fertiliser pools, and hear from one member in Shropshire about the benefits that they derive from this method of purchasing a key input.
Product Price
Pre-Harvest Pool
Over the last six years Fram Farmers’ fertiliser pools have become increasingly popular with members who wish to purchase this major input in a way that minimises price volatility within a buying season with a high level of certainty.
Post-Harvest Pool
Unlike the grain sector, there is no highly-developed futures market for fertiliser, so prices cannot be fixed in advance, which increases risk. Fertiliser market dynamics have also changed significantly in the last decade. In previous years the market has started relatively stable and predictable, typically in June, with discounts for early ordering, and prices would then increase steadily throughout the year. This is no longer necessarily the case, with Brexit adding an extra layer of uncertainty to the coming season.
Product Price
Managing risk has become much more important during the last decade and our fertiliser pools help members to do that, achieving excellent average prices across all products since their launch in 2013.
The uncertainty surrounding Brexit means that markets are currently unsettled Markets can be exceptionally volatile, creating further challenges for farmers in making buying decisions alongside the multiple other demands on their time. Securing the best prices demands constant monitoring of the market which can be impossible for many. Being able to respond rapidly to market lows is also essential, as often the tonnage available at that price is limited and snapped up very quickly. Expertise and constant involvement in the markets, coupled with committed tonnages, enables the fertiliser team to buy when prices are favourable. This puts them in a strong negotiating position with suppliers, so members benefit from attractive prices and lower risk. The uncertainty surrounding Brexit means that markets are currently unsettled, with the potential to become particularly volatile as we go into the new season depending on fluctuations in exchange rates as well as economic and political pressures. With unsettled markets likely to continue,
the use of pools as a method to purchase inputs or market combinable crops is now a very relevant option to consider. The fertiliser pools run from June to March, so grassland-based enterprises as well as arable farms can benefit. Participation is easy. A commitment form is enclosed with this issue, all you need to do is fill in your address, details of each product that you require and where you want it delivered.
Contact Catherine Coe, call 01728 727700 or email catherine.coe@framfarmers.co.uk
