Another farmer co-op goes under

[Northernlights]

Yes, but the price hasnt.
With the canadian problems, danish drought, etc the sky could have been the limit this yr, but with farmers prepared to deliver unpriced, we are screwed

Totally agree only really hay and straw are free market today and not all on contract unlike in 1976 when grain and potatoes especially soared. Oh for the good old days. Tying everything up on contracts etc.. will lead to shotages much sooner eg vegetables when high prices would have helped to ration stocks this coming winter.Will be interesting to watch supermarket PR behaviour in late winter this year when supplies start to dwindle.

 

[homefarm]

Send in 30 lorries of wheat to your CS. Not all are milling spec, some are over group 1 milling spec and some are only feed. Have you ever sampled from different parts of the field? Yield maps are variable enough - so is the quality. The store segregates the loads according to quality with several grades kept separately. Some of the borderline stuff is cleaned up so it makes milling grade (perhaps not Gp1) and the cleanings go in with the better feed spec without diluting that below 72 kg/hl 15% moisture. The grain that exceeds the milling spec is blended with the stuff just under the threshold. Any excess value is paid to members as a rebate or retained for store upgrades & development. You sincerely hope that the extra cost of the CS space is made up by achieving the higher spec.

I once heard a major grain buyer describe this as "on spec crap" and Openfield were loosing the contract.

The contract is the minimum a buyer will accept not what he needs to produce his brand.
The marketing is understanding what the buyer actually wants and then delivering it. I think some merchants do this better than others and perhaps the premium is reflected in the price they offer us as individuals.
As individuals I believe we do have a reputation with merchants which is reflected in the price they offer.

Most real businesses have a marketing department, grain buyers are our marketing arm and we should treat them as such.

 

[Brisel]

It is either below spec, on spec or above it. You have a contract to supply grain of certain standards at a certain point in time. If you are under it you'll have a claim or rejection. If you offer grain above those standards they win because they can use cheaper lower quality grain to blend to make that grist/malt.

There is no difference in price between offers whether I've sent under spec grain in before or over spec. The only differences are down to merchant shorts or longer hauls.

The idea of a CS working for its owners is that they get a wide range of quality at the intake so some poorer grades can be blended up and excess quality can be diluted down to benefit others whilst still making the top grade. This works well until everyone sends their crap in hoping to be upgraded but there's nothing to raise the average.

 

[homefarm]

I believe the marketing skill is matching the product with the end user. Every home has different requirements and has a different claims structure and location. Merchants will sample your grain and try to match what you have produced with a local consumer. If your grain is consistently over spec and there is a customer who needs above contract spec and is willing to pay £1/2 above then I believe you will get the phone call not the CS store. The phone call can be the premium.

 

[Clive]

Send in 30 lorries of wheat to your CS. Not all are milling spec, some are over group 1 milling spec and some are only feed. Have you ever sampled from different parts of the field? Yield maps are variable enough - so is the quality. The store segregates the loads according to quality with several grades kept separately. Some of the borderline stuff is cleaned up so it makes milling grade (perhaps not Gp1) and the cleanings go in with the better feed spec without diluting that below 72 kg/hl 15% moisture. The grain that exceeds the milling spec is blended with the stuff just under the threshold. Any excess value is paid to members as a rebate or retained for store upgrades & development. You sincerely hope that the extra cost of the CS space is made up by achieving the higher spec.

Stick 30 lorries in your own shed. If it is blended evenly, you might make a low grade milling at best. If it is variable, you try a few loads successfully then you get the next 3 back with rejections and the extra haulage charges which dilutes your premium and gives you some hassle in finding something to replace it or pay out the default so you can fulfil the terms of your contracts. If it's all Group 1 spec, pat yourself on the back and be pleased that you've done a good job with low storage costs.

Put quality in a big heap with crap and you'll end up with the lower common denominator. Send 30 loads to Clive via Frontier/Glencore/whoever and pay less than your local CS for storing it. You get what price you agreed but if it's over spec the shareholders of the merchant get the benefit. Clive's store isn't open for deliveries 18 hours/day & he doesn't have 3 driers to take in several batches of different grades or crops each day.

Your shed sounds good value. Now put another new one up for £80/t for another block of land you've got for a 3 year CFA. You might have the land for longer but you've got to tender for it again in 3 years. Can you justify that or do it for £80/t? I doubt it. There is little alternative use for the shed if you lose the extra land after 3 years apart from storing caravans and you'll need planning permission to change the use.

When I ran it my store could be open whenever you wanted for deliveries in at harvest - I had no need for 3 dryers and had you been a customer of mine I could have done EVERYTHING you say a cs store can other than colour sorting which is a job and an entire thread in

All that fir £8/t plus delivery without having to buy the store first ! And I was making.a very tidy return on investment doing it. It’s beyond my comprehension how anyone can go bust doing this, with someone else providing the capital lie a cs “investor” does it’s better than printing money !

I actualy need more storage than I have for harvest 19 so I will take some at a local commercial store at £8/t. The idea of paying that store a £130/t up front fee to do that is oddly not on my radar !

As for this idea that cs is some kind of alchamey turning feed wheat into milling and achieving higher prices through “marketing” instead of selling............ let’s see the numbers, maybe we should compare the average selling price of all that clever experts professional “marketing” and value adding vs my amateur “selling” over the last 5 seasons ? Let’s hope they are better than the pools !!!!!!!!!!

 

[Brisel]

I believe the marketing skill is matching the product with the end user. Every home has different requirements and has a different claims structure and location. Merchants will sample your grain and try to match what you have produced with a local consumer. If your grain is consistently over spec and there is a customer who needs above contract spec and is willing to pay £1/2 above then I believe you will get the phone call not the CS store. The phone call can be the premium.

The contracts have standard terms for claims under AIC number 2 or FOFSA 9a or whatever you’re sending. The contract specification is tailor made according to the consumer demand for protein, Hagberg, germination etc. As for this “premium” you speak of, I’ve never had such thing but guys like @Woldgrain Storage and @crazy_bull will have more experience of this kind of dealing.

 

[homefarm]

One example I have been involved in is bird seed. A small premium for bold ,bright, little chaff straw admix, feed wheat.
Get a call, send sample to buyer, he likes it, deliver as sample or better, next time he wants some you get the call. I also say if I have nothing suitable so do not waste their time.
I do talk with the grain traders and the drivers who pick-up the grain as to its destination and each homes requirement.
It was a lorry driver who informed me of the bird seed contract.

 

[Chae1]

When I ran it my store could be open whenever you wanted for deliveries in at harvest - I had no need for 3 dryers and had you been a customer of mine I could have done EVERYTHING you say a cs store can other than colour sorting which is a job and an entire thread in

All that fir £8/t plus delivery without having to buy the store first ! And I was making.a very tidy return on investment doing it. It’s beyond my comprehension how anyone can go bust doing this, with someone else providing the capital lie a cs “investor” does it’s better than printing money !

I actualy need more storage than I have for harvest 19 so I will take some at a local commercial store at £8/t. The idea of paying that store a £130/t up front fee to do that is oddly not on my radar !

As for this idea that cs is some kind of alchamey turning feed wheat into milling and achieving higher prices through “marketing” instead of selling............ let’s see the numbers, maybe we should compare the average selling price of all that clever experts professional “marketing” and value adding vs my amateur “selling” over the last 5 seasons ? Let’s hope they are better than the pools !!!!!!!!!!

What does the £8/t cover? Is that per month. Do you charge additional costs for weighbridge, testing, loading out?

 

[Clive]

What does the £8/t cover? Is that per month. Do you charge additional costs for weighbridge, testing, loading out?

everything for up to 11 months other than drying or cleaning ( both were available at rates similar to CS charges)

I don't do this any more BTW - the buildings store other none ag things now as return is even higher

 

[Chae1]

Sounds cheap storage.

 

[Renaultman]

everything for up to 11 months other than drying or cleaning ( both were available at rates similar to CS charges)

I don't do this any more BTW - the buildings store other none ag things now as return is even higher

Did you have a handling/weight loss charge? Normally about 2% IME

 

[Clive]

Did you have a handling/weight loss charge? Normally about 2% IME

we did as you do get store losses, shrinkage due to ventilation - if it had been 2% though I would be a VERY rich man though - merchants allowed us 0.2% !!!! (which was very tight)

Some stores do VERY well out of exaggerated shrinkage levels Im sure

 

[Renaultman]

we did as you do get store losses, shrinkage due to ventilation - if it had been 2% though I would be a VERY rich man though - merchants allowed us 0.2% !!!! (which was very tight)

Some stores do VERY well out of exaggerated shrinkage levels Im sure

I have seen that sort of figure and as you say, it's a nice little earner. One local store is charging 26p per tonne per week, I was told. Which wipes out any £1.00 a month carry you might get.

 

[d williams]

Malting barley is near enough a monopoly, so the big buyers will spend whatever it takes to break a farmer co op.
The only solution is PGI status for scotch whisky/scottish malting barley, to stop cheap imports screwing us down.
Scotch Barley could be valued at £350/t and it wouldnt make a jot of difference to the whisky industry.

Do the Scottish whisky producers have to use Scottish corn?
If not why haven't Scottish farmers made a bit more of this like Cornwall have with their pasties and cheddar with their cheese

 

[Brisel]

When I ran it my store could be open whenever you wanted for deliveries in at harvest - I had no need for 3 dryers and had you been a customer of mine I could have done EVERYTHING you say a cs store can other than colour sorting which is a job and an entire thread in

All that fir £8/t plus delivery without having to buy the store first ! And I was making.a very tidy return on investment doing it. It’s beyond my comprehension how anyone can go bust doing this, with someone else providing the capital lie a cs “investor” does it’s better than printing money !

I actualy need more storage than I have for harvest 19 so I will take some at a local commercial store at £8/t. The idea of paying that store a £130/t up front fee to do that is oddly not on my radar !

As for this idea that cs is some kind of alchamey turning feed wheat into milling and achieving higher prices through “marketing” instead of selling............ let’s see the numbers, maybe we should compare the average selling price of all that clever experts professional “marketing” and value adding vs my amateur “selling” over the last 5 seasons ? Let’s hope they are better than the pools !!!!!!!!!!

How many sheds, bays or bins do you have for your commercial storage?

I agree about the marketing or selling side. That’s a separate topic from the storage though relevant to discussion about Angus.

 

[yellow belly]

When I ran it my store could be open whenever you wanted for deliveries in at harvest - I had no need for 3 dryers and had you been a customer of mine I could have done EVERYTHING you say a cs store can other than colour sorting which is a job and an entire thread in

All that fir £8/t plus delivery without having to buy the store first ! And I was making.a very tidy return on investment doing it. It’s beyond my comprehension how anyone can go bust doing this, with someone else providing the capital lie a cs “investor” does it’s better than printing money !

I actualy need more storage than I have for harvest 19 so I will take some at a local commercial store at £8/t. The idea of paying that store a £130/t up front fee to do that is oddly not on my radar !

As for this idea that cs is some kind of alchamey turning feed wheat into milling and achieving higher prices through “marketing” instead of selling............ let’s see the numbers, maybe we should compare the average selling price of all that clever experts professional “marketing” and value adding vs my amateur “selling” over the last 5 seasons ? Let’s hope they are better than the pools !!!!!!!!!!

I deliver to my coop store and pay less than that for a years storage no up front fee I can even use the space twice if needed for an extra handling fee 7.50 one use £10 double use

 

[yellow belly]

Marketing
One example is a exclusive contract for a national bread maker for over 100000 tonnes of wheat
The farmers commit their tonnage and it goes direct to the mill from the farm the coop acts as agent

Started as a 4000 tonne contract

Many consumers of grain need to procure grain in bigger lots than any farmer can supply
Some of the biggest farming cos use coops to market their grain
The large merchants also have large supply contracts with large end users
Cerestar with frontier
Ensus
Vivergo
Ect


Selling take a sample to the corn exchange merchants bid for it deliver it and wait for the money

 

[glasshouse]

Do the Scottish whisky producers have to use Scottish corn?
If not why haven't Scottish farmers made a bit more of this like Cornwall have with their pasties and cheddar with their cheese

Any old barley makes whisky, its a scandal.
Pgi statu is long overdue

 

[Renaultman]

Any old barley makes whisky, its a scandal.
Pgi statu is long overdue

There's a lot of wheat must get it's nationality and identity changed as it crosses the border on it's way to Girvan then

 

[glasshouse]

There's a lot of wheat must get it's nationality and identity changed as it crosses the border on it's way to Girvan then

It doesnt have to, any old wheat is welcome