Another farmer co-op goes under

[oil barron]

Site cost a lot more to build than members and grant money paid in. Also expensive to run.

There was a members meeting before the administrator was called in and many options had been explored for getting a capital injection.

From what I heard it was a lack of confidence that eventually finnished it. When a few big growers said they were not going to put grain in for 2018 it became like a run on the banks so they were going to have no turnover for the year and no management fees to service the debt.

 

[newjames]

At the end of the day, put your own shed up and only risk 1 load at a time.

On monthly terms you would need a lots of buyers to do that and the time to do all the selling would cost a lot

 

[KennyO]

From what I heard it was a lack of confidence that eventually finnished it. When a few big growers said they were not going to put grain in for 2018 it became like a run on the banks so they were going to have no turnover for the year and no management fees to service the debt.

Fees were due wether you supplied your tonnage or not however some members were due the society money.

 

[Lincsman]

On monthly terms you would need a lots of buyers to do that and the time to do all the selling would cost a lot

Depends how much you have to sell, but what does it cost? I usually do selling while driving a tractor.. hands free of course.

 

[Hay Hoe Lets Mow]

Openfield 'owned ' 17000t of storage themselves and guaranteed the bank debt.

Openfield guaranteed the bank debt... how big was the debt Kenny? So am I correct in thinking that Openfield will have to pay that debt, as well as buying the entire site (as new owners) and also losing their initial investment for 17,000t of storage.... sounds very expensive for a business which has not made money for the last two years.

 

[oil barron]

Fees were due wether you supplied your tonnage or not however some members were due the society money.

Are the members going to get anything back or is it all going to the bank?

 

[Lincsman]

Site cost a lot more to build than members and grant money paid in. Also expensive to run.

There was a members meeting before the administrator was called in and many options had been explored for getting a capital injection.

If its not a secret, what was the cost of a tonne of storage space?

 

[principal skinner]

On monthly terms you would need a lots of buyers to do that and the time to do all the selling would cost a lot

I sell a few loads at a time, with a smart phone it’s easy to check prices hourly or daily while drilling spaying etc. Sold three loads by text message in the harvest.

 

[KennyO]

Openfield guaranteed the bank debt... how big was the debt Kenny? So am I correct in thinking that Openfield will have to pay that debt, as well as buying the entire site (as new owners) and also losing their initial investment for 17,000t of storage.... sounds very expensive for a business which has not made money for the last two years.

Can't rembers the figure for bank debt but it was considerable.

Are the members going to get anything back or is it all going to the bank?

Doubt it.

If its not a secret, what was the cost of a tonne of storage space?

£115-125 per tonne.

 

[Hay Hoe Lets Mow]

Ouch....

 

[Grain Buyer]

is the store currently empty then? As it was shut for harvest I'm guessing it must be? Are there still staff on sight or have they all lost their jobs?

 

[warksfarmer]

So let’s put this into perspective you buy into a CS store at £120/t. You then pay them £10/t/yr as a bonus.

You still need some form of pad or shed to tip on from the field. You then still need to load lorries when they collect. You still need to sweep the pad/shed up as you don’t want rodents.

Then you still sell the grain at the same price as me (milling wheat grower only).

Then after all that there appears to be a strong possibility that it’ll go bust and you’ll loose the original £120/t you invested as well as showing absolutely nothing for the £10/t/yr you’ve also paid into it.

Worst still when it goes bang and all your wheat is in their shed you can’t get it out, which even if you could you’ve got nowhere to put it because you haven’t got a decent shed?

So the only extra thing I’ve done is dry it which means pushing a couple of buttons on an underfloor drying shed which cost about £80/t to build in the first place. I think I’ll start charging myself £10/t/yr for doing absolutely nothing.

 

[newjames]

So let’s put this into perspective you buy into a CS store at £120/t. You then pay them £10/t/yr as a bonus.

You still need some form of pad or shed to tip on from the field. You then still need to load lorries when they collect. You still need to sweep the pad/shed up as you don’t want rodents.

Then you still sell the grain at the same price as me (milling wheat grower only).

Then after all that there appears to be a strong possibility that it’ll go bust and you’ll loose the original £120/t you invested as well as showing absolutely nothing for the £10/t/yr you’ve also paid into it.

Worst still when it goes bang and all your wheat is in their shed you can’t get it out, which even if you could you’ve got nowhere to put it because you haven’t got a decent shed?

So the only extra thing I’ve done is dry it which means pushing a couple of buttons on an underfloor drying shed which cost about £80/t to build in the first place. I think I’ll start charging myself £10/t/yr for doing absolutely nothing.

So you dont clean your sheds out,maintain them, repair them,upgrade all the conveyors etc, service your drier,get your weighbridge calibrated,cool and monitor your grain until its sold,do vermin checks and put down bait, i assume your grain delivers itself to the buyer at no cost to you and your drier works all by itself with no labour requirement , none of your conveyors or blowers use any electric, the labour you dont employ doesnt need any paid holidays,sick pay or pension contributions either. Neither of course do you keep all the records required for farm assurance so thats another cost you have saved. You of course dont need a laboratory or staff to check every load so you can segregate into different grades.No doubt there are other things you dont do that costs CS money that have slipped my mind. And I pay £8 a tonne iirc not 10 for all that.
As for the initial cost im sure you can put up a shed to store milling wheat for less than 120 a tonne but if you have to buy the ground at a commercial rate pay for feasability studies, planning for not just a shed but all the other bits likes labs, staff/driver facilities and build it so you can store multiple grades etc on a green field site using all outside labour then it adds up. Of course some have gone bust but most dont and its an asset that is easily seperated from the farm business unlike a farm store. If youre honest how much would you get for second hand bins or panels in a shed, certainly nowhere near what they cost, if i sold my original storage i would get 20 a tonne more than i paid.
Of course you can rent out a big shed for good money for non farm uses which is an advantage.

Of all that is for those of us lucky enough to own our land for tenants its even easier to see the sense in CS

 

[Wombat]

I use a central store but have never had to buy into it, i just get charged a weighbridge, drying (not this year) and a monthly storage charge, then sell it out when i want.

 

[bobk]

I use a central store but have never had to buy into it, i just get charged a weighbridge, drying (not this year) and a monthly storage charge, then sell it out when i want.

Me too , except it's 22 mile round trip .

 

[Wombat]

Me too , except it's 22 mile round trip .

Mines a lot less than that

 

[warksfarmer]

So you dont clean your sheds out,maintain them, repair them,upgrade all the conveyors etc, service your drier,get your weighbridge calibrated,cool and monitor your grain until its sold,do vermin checks and put down bait, i assume your grain delivers itself to the buyer at no cost to you and your drier works all by itself with no labour requirement , none of your conveyors or blowers use any electric, the labour you dont employ doesnt need any paid holidays,sick pay or pension contributions either. Neither of course do you keep all the records required for farm assurance so thats another cost you have saved. You of course dont need a laboratory or staff to check every load so you can segregate into different grades.No doubt there are other things you dont do that costs CS money that have slipped my mind. And I pay £8 a tonne iirc not 10 for all that.
As for the initial cost im sure you can put up a shed to store milling wheat for less than 120 a tonne but if you have to buy the ground at a commercial rate pay for feasability studies, planning for not just a shed but all the other bits likes labs, staff/driver facilities and build it so you can store multiple grades etc on a green field site using all outside labour then it adds up. Of course some have gone bust but most dont and its an asset that is easily seperated from the farm business unlike a farm store. If youre honest how much would you get for second hand bins or panels in a shed, certainly nowhere near what they cost, if i sold my original storage i would get 20 a tonne more than i paid.
Of course you can rent out a big shed for good money for non farm uses which is an advantage.

Of all that is for those of us lucky enough to own our land for tenants its even easier to see the sense in CS

Clean the sheds like you would clean your tip pad/shed so there’s no difference in that respect. What maintenance as they are new.
Older ones 60 yrs old require very little maintenance as well!
No conveyors as said it’s underfoor drying so the trailers tip and go.
Weighbridge service contract which covers other uses is 10p/tonne.
Cooling .... turn the fan on and walk away. Fan costs £2/hr in elec.
Vermin checks are part of the whole site 18p/tonne.
Monitoring grain .... spear once a week .... 5 mins
Haulage costs for delivery are like you, you pay to get into CS and we pay to end user? What’s the difference?
No employed labour, no pensions, no sick pay. All casual where needed.
Farm assurance records automated.
No lab staff because why do we need to segregate group one milling. No feed wheat on site. Send the samples to merchants in their own bags envelopes.

 

[ajd132]

Clean the sheds like you would clean your tip pad/shed so there’s no difference in that respect. What maintenance as they are new.
Older ones 60 yrs old require very little maintenance as well!
No conveyors as said it’s underfoor drying so the trailers tip and go.
Weighbridge service contract which covers other uses is 10p/tonne.
Cooling .... turn the fan on and walk away. Fan costs £2/hr in elec.
Vermin checks are part of the whole site 18p/tonne.
Monitoring grain .... spear once a week .... 5 mins
Haulage costs for delivery are like you, you pay to get into CS and we pay to end user? What’s the difference?
No employed labour, no pensions, no sick pay. All casual where needed.
Farm assurance records automated.
No lab staff because why do we need to segregate group one milling. No feed wheat on site. Send the samples to merchants in their own bags envelopes.

The future is cutting merchants straight out and going straight from CS to processors. A group of 500 farmers supplying a blended exact spec product to end user has got to be the future rather than Lee supplying a small amount through a middle man than he speared a few times in a 60 year old grain store. You're obviously much older than me so you're kind of short term thinking is understandable.

 

[Renaultman]

The future is cutting merchants straight out and going straight from CS to processors. A group of 500 farmers supplying a blended exact spec product to end user has got to be the future rather than Lee supplying a small amount through a middle man than he speared a few times in a 60 year old grain store. You're obviously much older than me so you're kind of short term thinking is understandable.

I am pretty sure most of Lee's does, and I know all of my little bit does. We just give a grain trader a small cut for organising it.

 

[ajd132]

I am pretty sure most of Lee's does, and I know all of my little bit does. We just give a grain trader a small cut for organising it.

And what about 500 farmers working togethor? Loads of successful co-ops over seas.