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Feed - a guide to getting the best price

02 October, 2019
To put it simply: in most cases, feed is best purchased as early as possible to secure the most competitive prices. If market conditions suit, many large-scale farmers buy between nine and twelve months in advance to achieve the best possible pricing. While this clearly offers short-term savings, there’s another less obvious benefit: a complete avoidance of any sharp price hikes that might arise due to market fluctuations.
If you phoned your supplier today and asked for a price, it is likely that they would sell you their “book” rather than offer the best prices,says Thomas Baines-Sizeland, Business Manager of Livestock and Feed at the AF Group. By adopting this ad hoc approach, you’re effectively flipping a coin with each purchase. The alternative is to work with a partnering body. By buying in advance – purchases you’ll end up having to make anyway – businesses can book cover in advance when markets are lower and more advantageous.
Forward contracts and raw material books allow farmers to lock in feed when raw material prices are attractive. So, why don’t more farmers do this? Many don’t because it requires a significant amount of time to track markets – the savings then become negligible compared against the invested time required to earn them.

There’s a way to avoid this completely: by working with a trusted agricultural partner who can negotiate based upon sound knowledge and buying power.
This same logic applies to buying in larger quantities. Buying in bulk reduces the average haulage cost per tonne – a significant saving when tallied up. While it’s true that many smaller farms would not have the need – or space – to purchase these amounts in one, giant purchase, there are still options. Where circumstances allow, investing in a feed silo is a way to bulk purchase without compromising space on farm or risking the feed’s condition. Although this requires financial investment and therefore may not be doable for many smaller farms, the savings from bulk purchasing would pay for it very quickly.

Whatever your unique farming situation, remember there are more opportunities for savings and risk management than you might think.

What’s your plan to minimise risk and ensure an affordable and sustainable supply of feed on your farm?

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