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

[bankrupt]

you dont have a clue how expensive it is, or not, because you've not got a quote for any other companies.

You're absolutely right, I don't have a clue. Most of our business is with Openfield.

I merely stated that the implied risk of failure was greater than I had supposed it to be before Openfield themselves drew the whole matter to public attention.

To be fair, however, most of the 50p/tonne will be in various layers of brokers' fees and commissions, and reinsurance, and the actuarial risk of failure probably well under 5p.

 

[Hornet]

You're absolutely right, I don't have a clue. Most of our business is with Openfield.

I merely stated that the implied risk of failure was greater than I had supposed it to be before Openfield themselves drew the whole matter to public attention.

To be fair, however, most of the 50p/tonne will be in various layers of brokers' fees and commissions, and reinsurance, and the actuarial risk of failure probably well under 5p.

What I cant understand is that Openfield's Credit Insurance was a great selling point for the Company, one which if they start charging for, they might in turn regret through a drop in sales?

I find it wholly unacceptable when most grain merchants milk interest on our produce for another 28 days+ before payment is cleared! Perhaps NFU et al should be insisting on credit insurance being included in all transactions with 28 day payment terms!

 

[Great In Grass]

You've been in the industry a long time if you have dealt personally with all those incarnations. Remember father dealing with Fulfords when they still had a depot at Trerulefoot but I was only a small boy then back in the days when we had our first Ford 4000 that replaced the Major.
Wasn't there a period before Dalgety when it was RHM?

I worked in the stores at Trerulefoot one winter, one of the coldest places on earth.

 

[crazy_bull]

What I cant understand is that Openfield's Credit Insurance was a great selling point for the Company, one which if they start charging for, they might in turn regret through a drop in sales?

I find it wholly unacceptable when most grain merchants milk interest on our produce for another 28 days+ before payment is cleared! Perhaps NFU et al should be insisting on credit insurance being included in all transactions with 28 day payment terms!

Milk interest? Not a lot of interest in the bank at the moment.

A lot of mills pay on 90 days.

C B

 

[Condi]

What I cant understand is that Openfield's Credit Insurance was a great selling point for the Company, one which if they start charging for, they might in turn regret through a drop in sales?

I find it wholly unacceptable when most grain merchants milk interest on our produce for another 28 days+ before payment is cleared! Perhaps NFU et al should be insisting on credit insurance being included in all transactions with 28 day payment terms!

Im not sure many Openfield customers know they have credit insurance? Although following Wellgrain's collapse maybe they should promote it more.

As for the payment terms - not many mills pay 28 days! As CB says, some are 90. At some point I can see merchants pushing their terms to the farmer beyond 28 days to keep flow even, but the first one will be brave. Bets on Frontier?

 

[Hornet]

Im not sure many Openfield customers know they have credit insurance? Although following Wellgrain's collapse maybe they should promote it more.

As for the payment terms - not many mills pay 28 days! As CB says, some are 90. At some point I can see merchants pushing their terms to the farmer beyond 28 days to keep flow even, but the first one will be brave. Bets on Frontier?

They don't any more, unless you pay an optional 50p/t levy.

As for milking interest, if the money isn't in your account then you are potentially paying more in OD interest! If its in the merchants account they are paying less or earning more! Its a cashflow thing hence "Milking interest".

 

[Renaultman]

Milk interest? Not a lot of interest in the bank at the moment.

A lot of mills pay on 90 days.

C B

They don't any more, unless you pay an optional 50p/t levy.

As for milking interest, if the money isn't in your account then you are potentially paying more in OD interest! If its in the merchants account they are paying less or earning more! Its a cashflow thing hence "Milking interest".

Yeah but as already been said it probably isn't in the merchants account. I know of one major steel company that pay on 90 days and are looking to increase that. I don't think 30 days is to bad, I wonder how many on here pay all their bills within 30? (I try and make sure I do for all the smaller and vulnerable businesses similar to me)

 

[yellow belly]

Imho the Openfield credit insurance Is not needed as they still act as agents still use the same risk management system they are a members cooperative with very healthy balance

When members grain is moved it still belongs to the member pool not Openfield
Openfield has credit insurance for consumers so unpaid grain movements are covered by insurance

 

[Condi]

As for milking interest, if the money isn't in your account then you are potentially paying more in OD interest! If its in the merchants account they are paying less or earning more! Its a cashflow thing hence "Milking interest".

I think you've missed what I was saying. The money isnt in the merchants account because the mill pays the merchant after 90 days, but the merchant has to pay the farmer after 28 days. Therefore the merchant (and their bank) are cash flow negative for 62 days.

Hence, at some point the merchant terms to the farmer will stretch beyond the usual 28 days, but it will be a brave merchant to make the first move.