Andrew Baldock's Basis PLUS Story
For the Baldock family there is little room for error on their mixed cropping and sheep operation in South Australia. They rely on decades of farming experience in marginal conditions to grow the best crop possible, but when it comes to getting the best price possible they use AWB's PRICE+ range. Incorporating a variety of different PRICE+ contracts into their business helps maximise returns by protecting against falls in the market while capitalising on price rises. Farming in a fringe cropping region on the Eastern Eyre Peninsula comes with higher production risk so being able to capture gains through marketing is more important than ever. Andrew Baldock is gradually taking more responsibility of grain marketing as the farm transitions to the next generation. He says strong marketing strategies are becoming more important in modern day farming. “Doing your own marketing is just as important, if not more important, than the agronomics side of things these days,” he said. “It’s easier to pick up 10% additional price than it is to pick up additional yield, so we need to pay more attention to it.”
The Baldock’s have used Basis PLUS contracts in the 15/16 and 16/17 seasons, tailoring their contracts depending on the basis and futures market movements throughout the season. They were able to secure an extra $15/tonne by locking in futures prices and then participating in the upside of the basis. “It turned out to be a really good product, because at the time we took out the contract our futures were very good but our basis was quite poor,” Andrew explained. “So it allowed us to participate over an 18 month period and still be able to pick up changes in both basis and futures. We locked in the basis later on and really added value to that contract as opposed to a straight cash contract on the day.’’
Andrew locked in grain at over $310/tonne and at that time the price was tracking at $245/tonne. “It was a pretty good move,’’ Andrew said.
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