Introduction

One of the key values of Hectare Trading is the concept of 'putting farmers first'. Essentially, everything we do at Hectare should be for the benefit of farmers. One of the most impactful way we do this is by using the blind auction capability of Hectare Trading to get our sellers the best possible price for their commodities at no extra cost to their normal selling channels.

But how much better are our prices? And how well can we quantify this extra value in marketing communication and onboarding with new sellers? This analysis will attempt to do this by examining the following:

• The difference in price from the ICE (UK) in the South of England.
• The difference in regional prices to the AHDB corn returns price.
• The average price offer range sellers can expect on their listings.
  

Hectare Trading vs the ICE (UK)

Since 'London Feed Wheat' prices on the ICE (UK) are futures prices based on homes in the South of England. We could in theory compare the prices we receive in the South region to the ICE (UK) price when the bid was created. Similarly to how we create our pricing predictions, but here we just compare the difference in the two prices. See below the mean price difference between the ICE (UK) price and Hectare Trading pricing.

It seems there's some evidence that since the launch of Hectare Trading we have been seeing better prices compared to the ICE (UK) in the South. With Hectare Trading prices on average this year being 50 pence higher than ICE (UK) price. It's worth noting however, we are only half way through the year and these prices tend to fall into pre/post harvest periods where this difference can deviate at a higher rate.

However, is this a good comparison for us to use when proving that Hectare Trading has the 'best price'? The futures marketplace is not directly comparable to direct buyer-to-seller/merchant pricing. As these buyers base prices directly to sellers on a number of factors, including haulage from farm to home and individual supply and demand in a given area.

Let's compare to a more representative set of buyer prices.

Hectare Trading vs the AHDB Corn Returns

The AHDB corn returns are the results from a weekly mandatory survey carried out by AHDB on DEFRA's behalf, any buyer who purchases more than 10,000 tonnes of arable commodities in a year has to complete the survey and each week the results are published to AHDB's website. If there is sufficient data, the survey will contain a price point for each commodity and grade combination in each region. Therefor these results should be more reflective to prices merchants and other buyers have actually offered sellers off of platform historically.

Feed Wheat

If we compare bid prices to their matching AHDB corn returns price (when this available) for 2024 where we have a complete year's worth of Hectare Trading data. We can see there is a positive price difference in all regions of the UK.

All of the price difference distributions have balanced normal distributions which is centered on a positive price increase on Hectare Trading pricing over the corn returns price. Due to the low level of samples, the North's distribution is skewed into a positive overall position due to higher individual prices.

Full 2024 distribution stats:

Full Hectare Trading distribution stats:

Hectare Trading best prices vs Corn Returns

Let's now repeat the same exercise, but only look at the best price that the listing received, rather than all bids.

2024 Avg Price Diff.

Full 2024 distribution stats:

Full Hectare Trading distribution stats:

A simpler metric

This is all well and good, but our sellers (and most buyers) won't want to have distributions and percentiles explained to them when reading our communications or in conversations with our commercial team. We'll need to create a simple metric that shows the Hectare difference in terms they understand.

The distributions above show the prices across the whole range of bids received in all listings. But when talking to our sellers, we only need to display their individual listing will get at least one price better than merchants would be offering to show better prices can be achieved on platform. I.e. "XX% of listings get bids with higher prices than the corn returns." is a much clearer and more applicable message than explaining our average pricing.

The overall percentage of Hectare Trading listings that achieve at least one bid higher than the corn returns in weeks in which we have comparable data in the same region as the listing is 77.7%.

Essentially, we beat the corn returns over three quarters of the time when we have comparable data.

Broken down by each region:

Feed Barley

Unfortunately, there are far fewer points of data for Feed Barley, both the number of listings on Hectare Trading and the regional corn returns prices. Especially in the North of England where we only have 5 prices.

The distributions above indicate that while we still maintain a positive price difference in the Midlands and Scotland, we are under-performing on barley pricing in the South of England.

Now let's see how often listings are getting a price over the corn returns feed barley price.

As our feed barley bid spreads tend to be higher than our wheat bid spreads, the distributions show a marginal improvement on average over the AHDB price. However, we can see above that for all regions apart from the South of England, sellers can expect a price higher than the corn returns price in their region over two-thirds of the time.

Milling Wheat

We have even fewer data points our sample for milling wheat when comparing to the corn returns. So these results should be taken with a pinch a salt.

Seeing as we don't have enough data to cover all regions, we won't break down the rate we're beating the corn returns into each region. But at an overall level, each milling wheat listing receives at least one bid higher than the 68% of the time (34 out of 50 listings we can compare).

Malting Barley

We only have three listings (all in Scotland) where we have corn returns data to compare to. In these cases we did not beat the corn returns, but this should not be taken as any kind of indicator of performance as it is such a low sample.

Hectare Trading Price Offer Range

Another way we could evaluate how we perform against merchant performance is by analysing how competitive our own listings are. By looking at the difference from the lowest and highest bid made on listings (known as the price offer range), we can offer information to sellers on how much more than can look to make in quantitative terms rather than approaching one merchant.

You can see the average bid spread for each commodity group below.