The July 2024 Farmanco Facts includes the following articles:
Invest for the Long Haul; Introduction to Options Strategies: Part 1; Understanding Spray Oils & Adjuvants and The Future of Grain Production (Maintaining Profitability in High Rainfall Cropping Businesses).
Contributors include:
Greg Easton (Mundaring), Mae Connelly (Esperance), Mark Lawrence (Kojonup) and Eric Nankivell (Albury).
Introduction to Options Strategies: Part 1
Mae Connelly (Grain Marketing Consultant)
Options provide flexibility, but at a cost.
They can protect against downside risk while allowing upside potential.
There are many different options strategies that can be designed for your view on the market outlook, and how much you are willing to spend on premiums.
Options have risks, including their cost, and the fact that they can only hedge the futures component of grain prices, not the entire price. Basis risk and currency risk are not protected by options, only the underlying futures component of price is covered.
This article introduces the mechanics of options and provides example strategies, assuming some knowledge of futures markets. While options can apply to both commodity futures and currency, this article focuses on wheat futures.
Invest for the Long Haul
Greg Easton (Farm Management Consultant)
Farmland has been a good investment since 1997.
Invest for the long term.
All investments can and will go both up and down.
With farmland prices recording significant growth in recent years, the question is asked, should I invest in more farmland or invest off-farm? The answer, of course, is complex and dependent on your individual circumstances.
Understanding Spray Oils & Adjuvants
Mark Lawrence (Agronomist)
Adjuvants are becoming a larger cost to businesses, especially with higher spray volumes.
The total adjuvant package can now cost more than the product the adjuvant is helping to work.
New surfactants are becoming available to market. It is always good to question how these are different from previous surfactants you have used, especially if they are a similar price to what you are already using.
As an agronomist, the number one query I get over the phone is related to what surfactant should be added to the mix, or what substitute can be used when there’s a surfactant in the shed to use up.
The Future of Grain Production
Eric Nankivell (Farm Management Consultant)
We have had a good run.
Costs have increased.
Profit margins are getting smaller.
Focus needs to be on increasing yields and income.
It is more important than ever to focus on costs.
Looking to maximise the result in a good season while minimising the potential loss in a poor one is essentially the challenge faced by all growers. At times, it is a fine balance to tread.
Pestbook 2024 has been posted out to all and is available for purchase in our website store. Profit Series 2024 is at the printers and due to be posted in the next couple of weeks.
If you’d like to contract data and benchmark yourself against other Australian Farm Business, visit Aglytica.com.
Contact your nearest Farmanco Consultant if you’re looking to engage a professional adviser for your business.
Subscribe to emailed or printed Farmanco Facts, though our website store or by calling our Perth office (08) 9295 0940 or emailing subscribe@farmanco.com.au.
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