Good procedures should win a market every time
STORE grain well and you will always be able to sell. Store it poorly and you will set the market floor, if you can sell at all.
That is the message from traders and end-users alike. Gone are the days when merchants would bid growers for grain regardless of storage conditions. Gone too are the days when millers, compounders, maltsters or shippers bought from merchants on price alone.
Now, failure to deliver grain consistently within contract specifications not only results in costly allowances. It is likely to limit the price bid next time you have grain to sell. "If suppliers are not reliable, then you tend to do less business with them," says Soufflet export manager David Doyle.
Some quality criteria, such as protein content or specific weight, are only partially in growers control, he says. But failure to deliver on moisture, admixture or infestation specifications are inexcusable. "These are completely down to storage, and storekeepers can control them 100% – they need to be managed." Even on protein or specific weight, good sampling procedure should prevent growers selling something that they cannot deliver, Mr Doyle believes.
With end-users scoring merchants ability to deliver grain on time and to contract, it is inevitable that merchants monitor farm suppliers in a similar way, he adds.
While assurance scheme membership cannot guarantee growers will meet contracts, the fact that an assured farm follows an agreed storage protocol should minimise rejection risks.
Membership is dramatically reflected in farm prices. With the coming harvest predicted to barely meet domestic demand, export prices for November are trailing £5/t behind the home-consumption market. "Non-ACCS wheat that consumers will not take effectively has to go to this export market. That is a £5 discount. It is proof that correct store management can benefit the farmer."
Whether big discounts and a possible shortage of assured grain will tempt some end-users to break their all assured sourcing stance remains to be seen, says Mr Doyle.
The UKs biggest compounder, BOCM Pauls, says it will not be amongst any that do. "If that situation occurs we will look at other raw materials, but we will not drop our standards," stresses cattle director, Charles Withecombe.
Since last harvest the firm has sourced only assured grain. Rejections and allowances at the firms 21 mills have fallen, he says. "I would be disappointed if growers started dropping out of assurance schemes now. They are there for growers benefit as much as anyone elses." *
WHY STORAGE MATTERS
• Secures a market.
• Builds future bids.
• Prevents losses.
• Assured status an asset?