Producers know how to manage production risk. Unfortunately, as far as price risk is concerned, the necessary protection is not always available. BESTER offers a wide range of marketing instruments to ensure sufficient price risk management. Clients can select their own combination of our marketing instruments. Each of these instruments has their own risk profile regarding price and delivery.
Some of the instruments used:
- Bester Grain Marketing plan (BGM-plan): For several years, producers and clients have been using the BGM-plan with great success for guidance on how to market their grain crop. The main objective of the BGM-plan is to ensure greater profitability in the long run. During the production season, pricing decisions are made that would enable the commodity to sell at targeted profitability levels. According to the BGM-plan, decisions are made based on well-considered financial and market data in order to prevent emotions from influencing the decision-making process. Production, input costs, yield history and the producer’s financial risk profile are taken into account in order to plan for long-term profitability. The plan then recommends the volumes of grain that can be marketed during specific growth phases in order to ensure the highest profit margins without exposure to the risk of non-delivery.
- Personal mandate level pricing: The producer is given an option to communicate target price levels for future periods and the trader will automatically execute the instructions once those levels are reached. This enables the producer to carry on with farming activities without having to constantly monitor price .
- Advanced pricing: The producer has the opportunity to plan ahead and price before harvest time to lock in favourable profits.
- Basis contract: The producer can lock in a basis price, with the market price being fixed later for deliveries during a future month.
- Delayed pricing contract: If, at the time of delivery, the market price is not favourable, the producer can roll his pricing forward to a future month to be priced at a later stage. The producer has the option to take a 70% advanced payment, with the balance being paid once pricing is finalised.
- Minimum price contract: This product gives the producer the opportunity to secure a minimum price without the risk of non-delivery by paying a premium for a put option.
- Average price contract: Producers are grouped into pools and given the opportunity to achieve an average price over a specific period.
- Spot market contract: Daily spot market pricing of stock already available for delivery.
- On-farm loading: On-farm loading can be done according to the producer’s requirements, the availability of delivery space, as well as logistics.
We realise that every client’s situation is unique, therefore we advise everybody according to their own needs. We can help you find the best combinations of marketing instruments that will suit your needs and will thus increase your profitability in the long term.
Sharing market knowledge
BESTER also believes in sharing valuable market knowledge with our clients to ensure that everybody is up to date with the latest market and pricing information.
We offer the following client services:
- Live market prices available on your own computer or cell phone. Register on our website (www.bester.co.za) and receive a username and password to see market prices live.
- Daily SMS messages with price indications from 09:00 to 12:00. As a valuable client, we keep you informed. Register your cell phone number on our website (www.bester.co.za) to receive your SMS.
- Daily market reports – every day, we acquire the most up-to-date local and international market information in order to make the correct decisions and to give our clients sound advice. By means of regular and direct contact with all the most important buyers and sellers of agricultural products, as well as by monitoring price trends daily, we are able to identify the best marketing opportunities for our clients. Price risk management receives our constant attention. Each of our marketers specialises in a certain area to ensure that clients receive only the best service. Please register on our website (www.bester.co.za) to receive your daily market report.