One rule for the grain merchant and another for the farmer ....

[An Gof]

Popped into a local farm today to use his weighbridge for some wheat I was delivering. Well being a wet morning he was around the yard and we had a yarn.
He was a bit miffed about a local grain merchant that he deals with. Now my friend sells said merchant quite a bit of his grain and receives payment on normal monthly terms. Nothing strange so far.
However my friend sells quite a bit of rolled barley to local farmers and, having exhausted his supply, had to buy some in. So he calls the merchant he sells to and enquiries about buying some delivered in. Did a deal for 4 artic loads but the merchant INSISTED he paid in full BEFORE delivery
My friend was rather taken aback and questioned this approach but said merchant was determined and my friend needing the barley had no option to pay up front.
Now in view of the Wellgrain debacle does this suggest merchants are a) strapped for cash or b) shi***ng themselves about bad debt.
Likewise as producers perhaps we should INSIST on cleared payment BEFORE collection. Surely What's sauce for the goose is sauce for the gander

 

[Breakthru]

The Banks are running scared, as any small business will tell you it is virtually impossible to borrow money for business purposes.
Classic example was in paper recently. Man had idea for shop in N Berwick. Tried to borrow 25k. Always told no 6 weeks after application to various banks.
Asked friend to lend him. Friend says can give you £5k but that was no use.
Friend phones couple of days later says got the money for you. Told Bank I wanted to buy a car.
That shop/cafe with novel idea now has 6 figure turnover and is very profitable.
Sums it up really, FSA or whoever rules are killing entreprenuers.
I personally have more than half a million of assets but when I asked for an OD was told that did not count. ???
Eventually worked out if you ask for less than £30k it stays local. £30-250K is regional and so on.
As stated in National press the next crash is down to car and credit card loans.
John Moulton warned Downing street and the Treasury that the sub prime game was a bust in 2001 but was ignored.
Next problem well signposted but will they act on it before it is too late.
Humphrey and co are too well corrupted to act on that by the way!

 

[Condi]

Nothing strange about it at all. All merchants will run credit insured sales. If they cant get credit insurance on you, or can only get a low level of credit insurance, then payment up front is the only option. 116t of wheat is about £18k worth of stuff which its a big pill to swallow if you bust or cant pay. For the traders, this position is non negotiable and a sackable offence if you do deliver outside of credit limits.

If you, as a farmer, took the view that you would only sell on a credit insured basis, and couldnt get credit insurance on your merchant, asking for payment up front is fair enough, but its nothing to do with cash flow and everything to do with the way the business protects itself from bad debt.

 

[Weare Cham]

It always scares me when a lorry of anything leaves the farm and you have to wait for payment. The level of worry varies with the reputation of who is paying too!

 

[An Gof]

Nothing strange about it at all. All merchants will run credit insured sales. If they cant get credit insurance on you, or can only get a low level of credit insurance, then payment up front is the only option. 116t of wheat is about £18k worth of stuff which its a big pill to swallow if you bust or cant pay. For the traders, this position is non negotiable and a sackable offence if you do deliver outside of credit limits.

If you, as a farmer, took the view that you would only sell on a credit insured basis, and couldnt get credit insurance on your merchant, asking for payment up front is fair enough, but its nothing to do with cash flow and everything to do with the way the business protects itself from bad debt.

Big pill to swallow if you pay up front before delivery and merchant goes bust between receiving funds and before delivery

 

[bankrupt]

He was a bit miffed about a local grain merchant

I'm a bit miffed about a local machinery main dealer down your way.

Opened an account after many pressing invitations over the years from his salesman, eventually bought a new machine on cash terms, and was asked, as a new customer, to pay a deposit - fair enough.

Then, notwithstanding his checks at Companies House revealing us to be good for the purchase three or four hundred times over, they insisted we paid COD.

Apparently this is the new farm animal - leasing good, cash bad.

For me, It all started in Cornwall.

 

[An Gof]

I'm a bit miffed about a local machinery main dealer down your way.

Opened an account after many pressing invitations over the years from his salesman, eventually bought a new machine on cash terms, and was asked, as a new customer, to pay a deposit - fair enough.

Then, notwithstanding his checks at Companies House revealing us to be good for the purchase three or four hundred times over, they insisted we paid COD.

Apparently this is the new farm animal - leasing good, cash bad.

For me, It all started in Cornwall.

Can't speak for machinery dealers but the grain merchant wasn't Cornwall based so I'm not sure it started here

 

[RTK Farmer]

Not unusual for machinery dealers wanting cod or 7 day payment on machinery.

 

[bankrupt]

the grain merchant wasn't Cornwall based so I'm not sure it started here

Popped into a local farm today
He was a bit miffed about a local grain merchant that he deals with.

Must have started in Devon, then.

 

[bankrupt]

Not unusual for machinery dealers wanting cod or 7 day payment on machinery.

7 day payment I've routinely and willingly done for 60 years.

Being still a bit wet behind the ears, however, being asked for COD was entirely new to me.

 

[Grass And Grain]

Did a deal for 4 artic loads but the merchant INSISTED he paid in full BEFORE delivery
My friend was rather taken aback and questioned this approach but said merchant was determined and my friend needing the barley had no option to pay up front.

So the merchant wasn't letting the farmer make a knock for moisture, bushels weight etc was he?

Next time said merchant wants to buy some grain, farmer wants to ask for payment before collection.

It really bugs me that grain contracts are so one sided. What are the NFU, AHDB Cereals and red tractor messing about at. They should be negotiating harder for us.

I have no problem at all with knocks for moisture or bushel weight BUT I want to see a bonus for dry corn and high bushel weights. What's fair one way must be fair the other way.

 

[Clive]

Why does anyone deal with these small time merchants ? Disaster waiting to happen

Wouldn't ever contemplate any serious credit for anyone smaller than the big 3 UK merchants

 

[bankrupt]

I want to see a bonus for dry corn and high bushel weights. What's fair one way must be fair the other way.

This won't work, Grass And Grain because, if the wheat intake average now is, say, 14% and 75kg/hl, we'll then be getting deductions for 15,14.5, 72, 73 and 74 to finance the bonuses for <14 and >75.

 

[An Gof]

This won't work, Grass And Grain because, if the wheat intake average now is, say, 14% and 75kg/hl, we'll then be getting deductions for 15,14.5, 72, 73 and 74 to finance the bonuses for <14 and >75.

Works for moisture, oil and admixture with OSR

 

[Grass And Grain]

Yep @An Gof is right, it works for osr. Get paid for what you produce.

 

[bankrupt]

Works for moisture, oil and admixture with OSR

The point I'm making, An Gof, is that buyers of grain, unlike OSR, are currently getting something for nothing.

If ever forced to pay for quality, they will inevitably first ratchet up the base specs in order to protect their margins.

 

[An Gof]

Moves afoot in France to move basic oil contract level for OSR from 40% to 42%

 

[An Gof]

I'm a bit miffed about a local machinery main dealer down your way.

Opened an account after many pressing invitations over the years from his salesman, eventually bought a new machine on cash terms, and was asked, as a new customer, to pay a deposit - fair enough.

Then, notwithstanding his checks at Companies House revealing us to be good for the purchase three or four hundred times over, they insisted we paid COD.

Apparently this is the new farm animal - leasing good, cash bad.

For me, It all started in Cornwall.

Perhaps the machinery dealer took note of your "nom de plume" on TFF

 

[Condi]

Most of the world trades on German terms (1% of the contract price for 1% oil), the UK is very generous already at 1.5:1.

 

[bankrupt]

Perhaps the machinery dealer took note of your "nom de plume" on TFF

Quite possibly so but, unfortunately, he also had a sight of both my car and my pickup when collecting his deposit.