WHAT IS GRAIN MARKETING?

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WHAT IS GRAIN MARKETING?

Introduction 

The term ‘marketing’ means different things to many people, however in terms of the agricultural industry, the term “grain marketing” does not involve sending out leaflets and flyers, nor does it relate to platforms or advertorial posts and content. Grain marketing to the agricultural industry is a whole other kettle of fish entirely, rather grain marketing refers to the process or the strategy behind selling a commodity, a grain crop.

We take a look at grain marketing basics in Australia, its origins, the modern grain marketing content and what this means for producers, and the secrets behind a successful grain marketing strategy. We also look at the role of grain marketing consultants and their role in the grain marketing process. 

Background to the grain trade – where it all started. 

The grain trade is one of the worlds oldest markets, with origins dating back as far as 9000 BC, where farmers first began expanding their cropping enterprises, growing for profit rather than consumption. 

Now, thousands of years down the track, the grain trade industry is fast paced, based upon commodity process and futures contracts. Product is gown on an insurmountably large scale, and the market rather than being based solely on local soil, is now global. 

Australia is a main player in terms of being a world leader in the production of grain, with Australian grain having gained a strong reputation for being high quality, disease free. Whilst the grain trade in Australia is governed by rules, established by Grain Trade Australia, there is no single peak body that is tasked with the responsibility of marketing Australia’s grain on an international scale. 

What is grain marketing 

The concept of grain marketing is relatively simple. It is essentially the process of converting grain into money. It involves a series of decisions, the development of strategies, focused upon pricing. 

For many farmers grain marketing is the most complex and hardest part of their farming enterprises and is an area in which many farmers look to industry experts, such as the team at Grainwise, for assistance. 

Grain marketing is based upon the futures market and futures contracts, which are legal documents that establish an amount of grain at a cost per bushel, with a delivery date that is in the future. Grain traders then use these contracts as a way to minimise their risk within the market. Traders, both buy and sell futures contracts. 

In terms of risk, the grain trade market is firmly based upon the principles of supply and demand, meaning that the trends and cycles are somewhat predictable, however things like adverse weather events, large storms for examples or significant increases or decreases to rainfall and temperatures can have a significant impact upon the market. 

The main players 

In order to adequately understand how grain marketing operates, it is firstly important to understand who the main players are in the grain marketing process, with the grain market having various people involved in the process. 

Initially of course there is the farmer or grain producer, without which there would be no market to begin with. In terms of grain marketing farmers are responsible for growing the crops, with crop selection and key factor in the market. 

The other key players are the buyers, the storage operators, and the delivery operators, which ensure that grain in effectively stored prior to sale, that the grain in transported to where it needs to be received and of course the brokerage aspects, as without a buyer, the grain goes nowhere.  

Successful grain marketing 

Effective grain marketing strategies are founded upon a combination of data and industry experience and knowledge. Grain traders must have a thorough understanding of the commodities market, keeping a close eye on real time and accurate data, to make decisions relating to trends and specific events that can affect the market. 

Some of the most pertinent things that grain traders will familiarise themselves with as part of ensuring successful grain marketing are; 

  • Cash prices within local markets
  • Yield data 
  • Product demand and inventory stocks 
  • Foreign market positions and statistics
  • Weather trends 
  • Market positions 

Without access to accurate data effective and successful grain marketing is unattainable.

Technology in grain marketing 

Given the reliance on accurate data for effective grain marketing, technology is also another critical element of the grain marketing process. With current advancements in technology across the world, and the rise of automation in processes across all industries, the grain industry has also adapted to include more automated process as part of grain marketing. Today, grain traders are able to customise whether forecasting and the scheduling of contracts, which has the effect of streamlining the grain marketing process and ids in profitability outcomes.  

Grainwise – Effective and efficient grain marketing 

Wit over 14 years in grain marketing experience the team at Grainwise are not only grain marketing consultants, but are your local grain marketing experts, consistently monitoring the market to capitalise on conditions that are best suited to our growers. The team at Grainwise specialise in both delivered markets and ex farm markets. 

Growing quality grain takes a lot of work. If you’re spending your days in the field, you don’t have time to follow the constantly changing grain market. But we do. 

Our team is constantly monitoring the market to capitalise on the conditions that benefit you. When the market spikes, you’ll be the first to know. Grainwise alerts you to the most important market news in real-time. Additionally, working with us means collaboration and up-to-date data, and market insights, which enable effective strategies and implementation of successful grain marketing processes. We’ll tell you how the market affects your business and guide you to make the most informed decisions.

Collectively, we strive to improve your farming operations by making calculated decisions that are going to benefit your business. At Grainwise, we don’t believe there’s a one-size fits all approach to grain marketing, which ensures a truly individualised strategy that is best suited to your business. 

Whether you grow wheat, barley, canola, or lentils, our team brings a deep market knowledge that helps you maximise profitability. Let our dedicated and highly experienced team focus upon the grain marketing, while you concentrate on what you do best, producing a superior quality product. 

Give the team at Grainwise a call for the most current market information and have a discussion with the local grain marketing experts today!

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