Farmers from across the region have been hearing about the potential benefits of precision farming and better market knowledge in a recent conference held at Newmarket race course, organised by crop production specialists, Hutchinsons and Gleadell Agriculture.

Farmers in the UK are well positioned to take advantage of precision farming, according to Shropshire farmer Andrew Williamson, who farms 900 acres near Bridgnorth.

Mr Williamson, a Nuffield Scholar who visited some leading proponents of precision farming around the world during his studies, has used soil and yield maps to target nutrients on his farm for several seasons and introduced variable rate drilling in 2013.
 
“UK agriculture is perfectly situated to widely adopt precision farming,” he told the conferences. “Unlike some parts of the world we have a long growing season that gives us time to measure what is happening and make adjustments.”

To do that effectively growers needed access to high quality data, he added. “Precision farming is not just about pretty pictures. You need to ensure the data is meaningful and relevant to your business to make proper informed decisions. It has to be based on good agronomy.

“In addition, that data needs to be available across all platforms so you can move it around in an efficient manner and use it to its full advantage.

“It won’t make a bad farmer into a good one, but it can make a good one better.”
 
Echoing Mr Williamsons’ observation, Oliver Wood, Hutchinsons’ precision technology manager, said good quality information was paramount. Without it, yield maps were just expensive wallpaper.

“Yield maps are the commonest precision farming tools, with about 40% of farmers saying they create them. But about 80% of those don’t do anything with them or do so only occasionally. There is clearly a problem.”

However, in the right hands yield maps could show clearly which parts of fields had the most potential, Mr Wood said. To ensure yields were correctly recorded, careful calibration was important and accurate driving was a must, though autosteer was helping here. Yield recording also had to switch on and off at the right time at headlands to avoid false readings.
 
Yield maps were most commonly used to calculate phosphate and potash offtake to ensure the right amounts were replaced, using a variable application spreader.

Maps could be used in more sophisticated ways, identifying yield trends over several seasons within fields, which agronomists and growers could then investigate. That required skill and good knowledge of the farm, but added value to data, he said. “This way you can start to build a picture of what is going on in your fields.”
 
Now, clever software being developed by Hutchinsons and supported by Gleadell Agriculture could help build this picture, said Nick Strelczuk, Hutchinsons precision technology specialist.

Omnia was a fully integrated management tool that could gather information from a multitude of sources, such as soil and yield maps, satellite imagery and weed and pest maps that farmers could create themselves.

This enabled historical and current data to be analysed and built into variable rate application plans, he explained. “Omnia can multi-layer this data, to enable intelligent and informed decision-making on the full range of variable applications.”

The system could significantly reduce input costs, improve yields, help farmers meet environmental objectives and improve machinery use, he added.

Omnia has been three years in development and will be fully launched later this season.
 
A fresh insight to managing market risk

Farmers attending the seminar were given a fresh insight into managing risk when selling their grain, including tools used by market analysts to predict grain market movements and help improve profits.
Chris Wood, oilseed trader and analyst at Gleadell Agriculture, said many technical analysts could predict market movement without considering any of the well-known fundamental factors that influenced grain markets, such as crop supply and demand, global macro-economics or exchange rates.
 
Instead, they looked at two areas – investment fund activity and market psychology.

“Hedge funds are especially active in agricultural commodity markets. They trade very large paper volumes, never physical grain, and can buy millions of tonnes very quickly,” he said.

“If you see the market breaking out of a trading range and you see hedge fund activity and money coming in, it’s confirming the momentum. This happened in October and December, when a lot of fund money came out of energy into wheat and corn, giving a clue there was a bit more in this move than people first thought.”
 
A good understanding of market psychology could also help show which way charts would move and by how much, identifying trends, likely turning points and areas of support and resistance in the market.

“Human beings move markets – they decide whether to buy or sell,” said Mr Wood. “When operating in financial markets they constantly make the same decisions because they come under the same emotions. That is reflected in price action – you constantly see the same shapes and patterns appearing on price charts.”
 
Major trends had three phases. In a bear market, this started with distribution, where astute investors start building big short positions, adding momentum to a downward market. This would be followed by worry, where merchant sellers would enter, and then panic, where less sophisticated sellers, usually farmers, came to the market.

2014 was a classic example, when the market fell £50/t lower in just six months. At the end of May, harvest futures were worth £150, which Gleadell predicted had a potential upside of £20/t and a downside of £80/t. “It was highly probable wheat was set for a fall. It was a no-brainer to put some on the books,” said Mr Wood.

Instead, most ex-farm sales during 2014 occurred at the bottom of the market, between August and October.

That highlighted the need for better risk management. Growers need to consider what time period they were selling and why, and their price risk, then talk to a merchant with international connections who could identify market-changing factors before they became news, Mr Wood concluded.