Whole Cropping a standing Cereal crop, Value / Acre

[sahara]

We have been approached by a neighbour to potentially sell him a growing cereal crop for him to whole crop as a stock feed.

So far we are liking the idea, it would be Spring Oats.

Now, how does one go about valuing the crop, he was proposing to buy it as a standing crop on a £/ac basis. Therefore he would be arranging and paying the harvesting costs.

I was thinking (grain yield * price, +straw value/acre) - combining costs.

Am I missing something? Is that too simplistic? What do others do?

Any thoughts or ideas gratefully received.

Cheers

 

[DRC]

About £1/ ton of dry matter is a standard price, with him paying for harvesting.
That does depend on having a weighbridge and testing samples for dry matter though .

 

[sahara]

Thank you.
I did wonder if there was a more scientific method!
It sounds like you are near a weighbridge, and I guess you weigh and sample each load as they pass through to the clamp, like delivering to a mill?

 

[DRC]

Thank you.
I did wonder if there was a more scientific method!
It sounds like you are near a weighbridge, and I guess you weigh and sample each load as they pass through to the clamp, like delivering to a mill?

I grow maize and sometimes hybrid rye for an AD plant that has its own weighbridge and proper tester.
otherwise you’d have to estimate yield of grain/ straw and what it’s worth not to have to combine and dry it.
what do spring oats yield?

 

[sahara]

Ahh that makes sense.

Our Oats generally yield on a long term average 2.25t/ac. Last year they grew that and a little more, but a wet and windy 10 days towards the end of August put a lot on the floor!

Looks like I'm going to need to break out the calculator and do some estimates.

 

[Spencer]

He’s approached you.
Charge him what you want?
Remember you can always come down on price, But it’s rude to go up...

 

[Agri Spec Solicitor]

Here is our wholecrop winter wheat formula:
Grassletting rent for the summer minus the fert cost minus half lime cost is what I get from it.
Customer does all the rest at his cost.
I get land back after harvest. If something doesn’t go to plan or expectation then it is in the mix for next year.

 

[teslacoils]

Rent them the land or charge by the ton. Anything else will be a pain.

 

[Brisel]

Grain yield + straw minus harvesting & drying costs is fairly simple. A weighbridge would be fairer, especially with spring crops that can be more variable. Other than no earwash sprays, variable costs for whole crop aren't much lower.

I was offered £15/t fresh weight for whole crop by an AD plant regardless of grass silage, cereal whole crop or forage maize. The buyer organised all the harvesting, used our silage clamps & back loaded with AD separated liquid. Fortunately we didn't strike a deal & they went bust a couple of years later, owing a lot of money, though the AD plants are still running.

Your buyer will also be keen to point out other benefits to you;

• Taking weeds off before they set viable seed. This depends on what growth stage they harvest at - removing black grass before viable seed set will cost you some dry matter yield.
• Early entry for a following crop - this can be priceless in some circumstances.
• Saved harvesting & handling costs where you are constrained by not having your own combine or being short of storage space.

 

[e3120]

Whilst the £100/t DM is a good figure for the true value, I doubt that current spot figures for grain/straw would be anywhere near the same. The buyer might be better gambling and waiting until feed fever has abated. Converse for the seller.

 

[2wheels]

surely all your growing costs plus a profit for you.

 

[warksfarmer]

We have been approached by a neighbour to potentially sell him a growing cereal crop for him to whole crop as a stock feed.

So far we are liking the idea, it would be Spring Oats.

Now, how does one go about valuing the crop, he was proposing to buy it as a standing crop on a £/ac basis. Therefore he would be arranging and paying the harvesting costs.

I was thinking (grain yield * price, +straw value/acre) - combining costs.

Am I missing something? Is that too simplistic? What do others do?

Any thoughts or ideas gratefully received.

Cheers

£30/t whole crop weight

 

[Boysground]

@sahara i buy maize on dm basis and it works well.
The most important part is for you and your neighbour to decide if there is potential for the agreement to continue for a few years. If you do, settle on a price that works for both of you, not just a quick profit for one or the other of you. The arrangement won’t last if you do that.

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[neilo]

We have been approached by a neighbour to potentially sell him a growing cereal crop for him to whole crop as a stock feed.

So far we are liking the idea, it would be Spring Oats.

Now, how does one go about valuing the crop, he was proposing to buy it as a standing crop on a £/ac basis. Therefore he would be arranging and paying the harvesting costs.

I was thinking (grain yield * price, +straw value/acre) - combining costs.

Am I missing something? Is that too simplistic? What do others do?

Any thoughts or ideas gratefully received.

Cheers

That is how most people work it out round here, which is simple and fair IMO. Why complicate it any further?

 

[DRC]

That is how most people work it out round here, which is simple and fair IMO. Why complicate it any further?

The complications arise when one party things it’s a 3 ton crop and one a 2 ton crop
unless it goes over a weighbridge it’s a gamble either way

 

[deleted user 837354]

In Somerset it's a sellers market.

Depends on how much you value your relationship with the seller as well. Could be useful clearing a field ahead of time to get things done behind though.

I would work out your costs (the straw alone in this part of the world will be valuable I'd suggest) and put on some profit for yourself. Bear in mind no harvesting, baling or drying costs though.

You have historical records for your yields, but you will know what a good crop looks like or not. If it's not that great you can agree to drop the price per acre for the man. Seems fair enough.

All this talk of £/DM is all well and good if you have a weighbridge and want the grief.

 

[Brisel]

How do you incentivise the grower to produce the best crop? If they need it cut earlier to take weeds off the field before it is at the maximum DM yield then why should the buyer take the hit? The tricky bit is determining the DM weight without a weighbridge.

 

[deleted user 837354]

How do you incentivise the grower to produce the best crop? If they need it cut earlier to take weeds off the field before it is at the maximum DM yield then why should the buyer take the hit? The tricky bit is determining the DM weight without a weighbridge.

Gentlemen's agreement. If Sahara is in the region I think he is then there is no reason he couldn't grow a half decent crop and value it accordingly. In this part of the world forage and land are often in great demand. A simple fee per acre for the standing crop and let the other party arrange harvest. Would be good if some muck/slurry also came back but may not be possible or desirable.

I would also (politely) add that in my experience, a dedicated arable grower often has a different approach to growing things and tend to produce better crops merely due to attention to detail and because they understand things like decent spray timings.

 

[teslacoils]

Gentlemen's agreement.

Yup. A neighbour only bums you once.

 

[Boysground]

I have probably done all the deals suggested for maize, it all come down to the parties involved in the deal.
Dry matter is the best way to do it, everyone knows what’s what. I have done it weighing every trailer which is a headache, but the advantage in maize is that if the grower wants it off early to get wheat in the ground and the buyer wants dm for feed payment by dm can help delay harvest.
I think in @sahara case if there is a convenient weigh bridge this would be the best way to start. But perhaps in following years where everyone knows the score a by the acre arrangement would be fine.

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