Upgrading is justified
in the east
OUTDATED grain handling and storage facilities can prove costly. But switching to a contractor, as at a co-op, is not the only alternative, explains an Essex consultant.
"It is getting very hard for farms with less than about 400 acres of combinable crops to justify re-investing in their own storage," says Tim Isaac, Fenn Wright farm business consultant.
But for larger units, such as Sherwood Farms at Easthorpe, near Colchester, a relatively modest revamp of facilities can speed harvest and avoid costly knock-on effects, says Mr Isaac.
Sherwood Farms is typical of many all-arable farms in having a mixture of facilities, some 40 years old and facing considerable upgrading outlay.
The farmed area is 430ha (1063 acres), but an extra 90ha (222 acres) will be added this autumn when a let farm is taken back in hand.
Current storage is 2850t on flat floors, some with aeration, 1000t in outdoor bins and 900t in indoor bins.
"Many bin-based storage systems on farms are not only slow and inefficient, but also a potential disaster from a health and safety point of view," says Mr Isaac. "The indoor bin complex at Sherwood Farms would cost at least £10,000 to put into a usable state."
All the options were analysed and costed (see table). "For a total of £15-20,000, depending on how much work is done by farm labour, the internal bins will be dismantled, the grain walling re-used and the floor levelled. This will create a 1000t flat floor store which will be quick and easy to use."
This first revamp phase will also include replacing an under-floor aeration system in another barn with a timber floor. "This will help reduce the annual maintenance required and increase the aeration efficiency."
In phase two, in 2002, two off-lying stores will be let for commercial use, a new flat floor store being erected in their place. "Some smaller farms could earn more from developing and letting their farm buildings than from using them to store grain.
"Sherwood Farms is a large arable unit with the ability and willingness to expand. All parties felt such investment was justified and necessary to enhance the long-term viability of the business.
"A smaller farm in a similar situation but close to a good contract store would find it much harder to justify the economics of re-investment." *
On-farm Contract storage storage
Capital depreciation & interest 8.00 n/a
Repairs & maintenance 2.00 n/a
Drying 1.00 1.50
Dressing 0.40 0.60
Handling 2.00 3.00
Weighbridge & sampling ** 0.32
Storage charge n/a 5.00
Interest on grain 2.00 2.00
Weight loss n/a 1.00
Haulage 5.00 9.00
Total 20.40 22.42
* Costs given at £/t for average 600-acre arable farm.
** Negligible depreciation and labour time.
Source: Fenn Wright.