SCOTTISH GROWERS must not gamble with the rising cereals market, NFUS arable guru John Picken has warned.

With higher grain prices hitting the headlines, Mr Picken recalled the mistakes made during the cereals boom of 2007, when growers were tempted onto the spot price market only to lose out on much-needed revenue they could have secured with better marketing.

Mr Picken, the union’s combinable crops chairman, said: “Growers need to respond positively to the current rising market by having a flexible marketing plan in place. The alternative of just taking what’s offered on the spot market for the whole of the year’s production is simply gambling. And very few gamblers end up as winners.

“We only need to think back to three years ago when grain prices rose to more than £200 per tonne due to shortages in the wheat market. That year many growers were caught unawares by the rapid changes in price and as a result were unable to realise as much for their crops as they should have. That was disappointing, as prices had been below the cost of production for a long time before the 2007 harvest.

“With the ongoing volatility in global, European and UK grain markets, few can predict where prices will end up, but there will be much needed opportunities for growers to take advantage of this harvest. But to do so, they have to know the quality of their grain, what their grain is truly worth and they also need to consider protecting themselves from price changes.”

Mr Picken said that knowing what grain was worth meant assessing the quality of what was coming off the combine and keeping abreast of prices. To do this, all growers should receive the HGCA’s updates on prices and market analysis – as levy payers, that was a service that they helped fund, so they should make use of it.

“When it comes to selling the crop, having a flexible marketing plan that could include forward selling part of the crop or using other risk management tools such as futures or options trading, will give any grower some degree of price control,” he said. “The HGCA makes a range of marketing resources available that are worth exploring.

“Growers also need to be attuned to any contracts which are being offered. This year, some have been available with a minimum price plus uplifts linked to the futures market. For many years, NFUS has been suggesting contracts of this type, but growers need to understand both the benefits and costs,” he cautioned.