Oilseed Rape

Promising market prospects for 2006 and beyond mean most UK growers should be able to make a reliably healthy margin from sowing oilseed rape this autumn, according to the latest outlook from national specialist, United Oilseeds. Whatever their growing regime, though, it is vital they utilise the complete range of marketing tools available over the full production cycle.

Including normal oil bonuses and haulage costs, United Oilseeds currently anticipates ex-farm prices of around £150-£155/tonne for harvest 2006. And, with end of season EU rapeseed oil stocks set to fall back to more normal levels, escalating fuel and fertiliser prices discouraging plantings elsewhere in the world and growing global demand both for low saturate rapeseed oils and biodiesel, actual realisations could easily be even better.

”Without anything exceptional in the yield department, most growers should be budgeting to make gross margins of a good £75/tonne from their 2005/6 crop with current price prospects,” pointed out United Oilseeds commercial manager, Ian Munnery. “And those able to produce nearer 2 t/acre (4.9 t/ha) will be looking at margins of £115/t or more.

”As we've found in recent years, though, the global oilseed market can be extremely volatile, with prices changing widely in a very short time.

”Under these circumstances, growers must protect themselves by making use of all the marketing tools at their disposal over the full two year cycle of production - from the time they decide to sow the crop this summer right through to its last disposal time in the summer of 2007.

“Minimum price set aside contracts have proved extremely valuable in this respect, as have commercial pools traded on acreage rather than tonnage,” observed Ian Munnery. ”In fact, I would go so far as to say that the difference between success and failure with oilseed rape production today lies more in its marketing than in its agronomy.

”The prospects for the 2005/6 oilseed rape crop are certainly encouraging,” he concluded. “However, I would advise growers to lock into reasonable prices whenever available over the growing cycle rather than taking a wait-and-see approach to marketing.

”Bitter experience has shown that watching the market carefully and selling a proportion of your production on a regular or pooled basis is a far better bet that aiming to hit the top of the market with the whole lot. After all, no one recognises a high price until it goes down, and hindsight trading isn't a strategy designed to keep the bank manager happy. On the other hand, a good price is one which allows you to make a decent margin; something that everyone needs to appreciate when making this season's cropping and marketing decisions.”