A new cooperative group involving 10 farmer-owned central grain stores has been launched in an attempt to improve supply chain efficiency and develop new value-added cereal markets.

 

Called NetworkGrain UK, the group, which stored a total of 674,000t of grain this harvest, includes the likes of Aberdeen Grain in Scotland, Wiltshire Grain and Cambridgeshire-based Camgrain.

 

“In the past the grain industry has been very farmer-focussed, but we have to work together more to better meet market needs,” said Camgrain’s John Latham, chairman-designate of NetworkGrain UK. “There’s a lot of value to be had by working more closely.”

 

In particular, he said all member storage facilities would be upgraded to improve storage and handling capacity and reduce loading/ unloading times. Shared marketing expertise, logistics and IT platforms would add to this and give end users greater confidence in the timeliness, quality and consistency of supply. Having a larger ‘pool’ of grain to market, also put the group in a stronger position when negotiating new supply contracts, he said.

 

Closed-loop dedicated supply contracts, such as those developed between Camgrain and Sainsburys and between Hampshire Grain and Coors brewers would be central to the group’s marketing, Mr Latham added. “Our aim is to get 50% of NetworkGrain’s tonnage sold through such agreements. The remainder will be marketed via more traditional methods throughout the season.”

 

Newly-formed Openfield (formerly Grainfarmers and Centaur) will supply marketing and business support to the group and six potential new store members from Centaur could take the total NetworkGrain UK tonnage to 1m tonnes in 12 months time, Openfield’s grain group development director, Rob Sanderson said.

 

“The opportunity to build this network is absolutely right at the moment. Commodity markets are fragmenting and there’s more focus on value-driven products that earn higher margins for all chain members.

 

“Our aspiration to double capacity over the next five years is eminently doable; we just need to find the right partners to work with.”

 

The English Food and Farming Partnership (EFFP) backed the new group and EFFP’s Neil Adams believed there was significant potential for future development of central storage, particularly given ageing on-farm storage which was expensive to replace.

 

“Over a quarter of all storage on farms is over 30 years old and the infrastructure and lack of capacity is often the main limiting factor for many businesses. Many also find it difficult to meet assurance requirements.” A survey by EFFP suggested there was a need for a further 1m tonnes of central storage in the UK, he added.

 

NFU combinable crops board chairman Ian Backhouse said NetworkGrain’s launch was a positive step for the arable sector. “This should result in opportunities to capture real value and deliver real improvements in profitability back to the farmer-owners and users of central storage.”

 

NetworkGrain UK members are: Cannington Grain, Devon Grain, Kernow Grain, Hampshire Grain, Weald Granary, Wiltshire Grain, Aberdeen Grain, Camgrain, Union Grain Storage and Honey Pot store. The group is owned equally by the 10 founder members and each store elects its own representative to be a director of NetworkGrain UK. It is hoped the new company will be registered in the New Year.