3 April 1998

Buyers backing assurance saysign up soon

What impact will grain assurance have on feed, milling and

malting markets? Amanda Dunn finds out

WE dont expect all farmers will become registered in the early years. But we hope that within three years there will be sufficient grain of ACCS status for the UK milling industry to source its total requirement from assured farms," says Alex Waugh of the National Association of British & Irish Millers.

"Much depends on how many farmers sign up and how much wheat is produced as to what proportion can be procured each year, but as an industry, we believe three years is a realistic timescale to aim for."

Some mills are already giving preference to farmers supporting ACCS. "It is our intention that within the next few years we will only give growing contracts to farmers signed up to ACCS," says Charlie Fillingham, wheat director for Allied Mills.

"As far as other purchases are concerned we intend to give growers a period of time to adopt the standards after which we will look to buy exclusively from ACCS farms."

Rank Hovis is taking a similar stance. "Realistically there wont be enough assured grain available to meet our exact demand in the first year," says Peter Jones, wheat director at Rank Hovis. "But certainly within three years we want to see all our grain bought under a scheme such as ACCS."

Commitment

Heygates is one of the UKs largest independent mills and has been impressed by the commitment of local farmers to ACCS. "Earlier this year we held an open day at the plant, looking to attract interest for Class I and II buy-back contracts, grown to ACCS standard," explains wheat buyer George Mason.

"Within 48 hours we had secured enough contracts to meet our demands, with all growers pledging to become assured by harvest this year and accepting that no premium will be paid for the ACCS aspect of the buy-back contract.

"While no premium is anticipated for ACCS grain, by year three it will be difficult for any non-assured farmer to sell his crops at the same price as assured grain," explains Mr Mason. "A two-tier market is inevitable. The market price will be for those in the scheme and a discount will be deducted for those not."

All three millers emphasised their commitment to the scheme even in difficult years. "Tricky seasons or low spec grain may call for an element of adaptation. But once we have moved across to procuring assured grain it will not be our policy to switch back," confirms Mr Mason.

&#42 MALTING

"Approximately 50% of our grain comes from grower contracts," explains Bob King of Crisp Malting, which uses 200,000t of malting barley each year. "In Scotland all pre-harvest contracts are now with SQC farmers and we anticipate being able to use 100% SQC grain by next year.

"In England, contracts signed up since the beginning of the year are with farmers registering with ACCS. Next year all contracts will be with ACCS growers and by 2000 we want to be in a position to buy only assured grain," confirms Mr King.

"In the past, even in poor growing years, we have been able to be self-sufficient," explains Mr King. "If we had to import, Scandinavia are already considering a similar scheme and as their customer we would be demanding assured grain."

Other maltsters believe consumers are becoming increasingly aware of the standard of raw materials used to make final products.

"There is gradual pressure from people we supply looking for total traceability," says Alan Macdonald of United Distillers which procures 250,000t of malting barley each year.

"In Scotland, from 1998 onwards, we will only place pre-harvest contracts with assured grain farms. In England, a years grace will be given."

As far as sourcing the balance of his requirement, Mr Macdonald intends to give preference on movement and procurement to assured growers who have a surplus over their growing contracts.

"As more and more people become involved with the scheme, those who arent will lose access to certain markets," confirms Mr Macdonald. "And the probability is a two-tier market will develop."

&#42 FEED

The new Code of Practice for the Manufacture of Safe Animal Feeding stuffs requires compounders to be confident of the quality of their raw materials, explains Judith Nelson of UKASTA.

"Arable farmers participating in ACCS can provide the level of assurance compounders require under this code of practice.

"With this in mind UKASTA anticipates that it may take as long as two to three years before feed compounders are able to source solely from farms participating in ACCS, although some companies may wish to do so earlier," she suggests.

Chris Rackham of Associated British Nutrition uses 350-400,000t of home-grown cereals each year to produce about 1m tonnes of compound.

Sensible requirement

"We are very keen to support farm assured grain. As part of the human feed supply chain, we believe it is a sensible requirement of our customers.

"We hope to procure as much farm assured grain as possible, as soon as possible. Due to availability we only anticipate being able to use a small percentage next season, but our target would be to move solely across to farm assured grain within three years.

"Poor harvest can affect the quality of grain, but it would be our strategy to adjust matrix values to accommodate lower quality grain rather than seek grain from non-assured homes."

Mark Ringrose of BOCM Pauls sources 1m tonnes of home-grown cereals each year. "Millers and maltsters have certainly taken the lead with their statements on procurement of ACCS grain. As a company we originally anticipated there being sufficient assured grain available to source our total requirement from ACCS farms by the year 2000. Recent suggestions indicate we may be able to do this as early as next year." &#42

Whether a crop is destined for a milling, malting or feed compounding outlet, buyers all agree – their customers want assured crops and they want them soon.

ASSURANCE UPTAKE

MILLING

&#8226 Growing contracts preferred with ACCS farms now.

&#8226 No premium.

&#8226 3-year deadline for all grain to be assured.

MALTING

&#8226 Growing contracts only with ACCS farms from 1999.

&#8226 All grain preferred ACCS from 2000.

FEED

&#8226 Feed compounders code of practice.

&#8226 Compounders support ACCS.

&#8226 All ACCS grain preferred within 2-3 years.