Gambling on agriculture in South Holland

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Did you know you can buy and sell for example a ton of wheat and not have any land to have farmed it from? Are you a farmer, merchant, wheeler dealer or just someone trying a gamble to make a couple of quid, writes Martin Ulyatt.

The beauty of agricultural grain is that it has an ongoing floating value. It has a current value at the time against what it would cost to use in industry. For example wheat in a feed version for cattle or milled into flour and made to use bread. Barley malted to be used in beer and whiskey or even oil seed rape seeds used to make everyday cooking oils.

It has a futures value where you can sell/deliver your grain for a certain month/year ahead and gamble that due to other effects around the world it goes up. This is called the futures market. People on the stock market could also buy and sell grain like shares on the hope that on their financial understandings and advice help make themselves/companies some money. It can also go the other way that you can buy any agricultural grains and they go down in value due to worldwide surpluses and other countries having better quality.

This year so far both barley and OSR yields have been below average in both yield and quality. This will result in less return to the farmer which he has to reinvest into his next year’s crops. Farmers are currently just starting to cut winter wheat and early reports are that both yield and quality are both significantly better than its counterparts, barley and OSR.

Hopefully there is a positive to come out of this harvest and we can look to a brighter future.