world agriculture down on the farm
agricultural services pedigree livestock news dairy beef agricultural machinery agricultural property agricultural organisations
     
Stackyard News Feb 06
       

news index

beef links

   

EBLEX Alert On Forward Contracts
09/02/06

Beef producers should do their sums carefully before entering into a forward contract, says EBLEX.

beef cattle

BEEF farmers have been cautioned to take great care before locking themselves into a forward contract which could see them out of pocket.

Although these contracts can be a useful way to reduce the financial risks of beef production and help buyers get the right cattle delivered at the right time, there can be pitfalls for the producer, says the English Beef and Lamb Executive (EBLEX).

In its latest “Beef Action For Profit” leaflet, beef farmers are told they need to understand how forward contracts work and whether they are right for their own business before taking the plunge.

Guidelines for use when considering such a contract include:

  • Understanding production costs and cattle performance to assess the financial implications of a forward contract.
  • Choosing the right sort of forward contract for your system
  • Ensuring details of specifications required are set in advance - and that they are realistic.
  • Knowing the financial penalty for failing to deliver is usually based on the cost difference of filling the contract at market prices.
Nick Allen, EBLEX Senior Regional Manager, said: “Forward contracts can be extremely useful but they don’t suit every producer.”

link How To Be A Select Beef Producer
link Beef Outlook: Healthier Market Balance in Prospect
link Delight For Dutch At European Fine Food Fair
link EBLEX Targets French Meat Lovers

feedback    
 
    home | agri-services | pedigree pen | news | dairy | beef | machinery
quota | property | organisations | site map