Investment of £200,000 offers long-term gains
Investment of £200,000 offers long-term gains
With grain prices on the
floor, investing £200,000 in
a new on-farm store seems a
bold move. Andrew Blake
reports from Dorset
WHEN Charles Foot began revising plans for drying and storing on his recently expanded farm near Weymouth, feed wheat was fetching £80/t.
Now prices for this harvest are only three-quarters of that and the investment looks even harder to justify, he admits.
"But farming is a long-term business and I wouldnt be in it unless I was an optimist. At least an on-floor store can have other uses if wheat continues to be unprofitable."
Since 1878 part of the Foot familys farm has been rented from a Cambridge University college which has held the land since the 16th century. But the investment on the 970ha (2400 acre) Bayard Dairy, Upwey, is solely his own.
Taking on a 300ha (750 acre) tenancy at Bincombe a mile away, and the possibility of an export facility being developed at nearby Portland harbour, encouraged him to go ahead with the 4000t on-floor set-up. The building is designed to last 50 years.
The only realistic alternative was to sign up with the Wessex Grain Co-operative at Henstridge, Somerset.
"I reckon the costs would have been greater when you take into account the £3.25/t haulage charge. Wessex do however market our grain." Wheat occupies 320ha (780 acres), mostly after grass, with 50ha (120 acres) of linseed, 28ha (70 acres) of oilseed rape and about 20ha (50 acres) of barley.
Mr Foot budgets for wheat yields of 8.6t/ha (3.5t/acre). "But we often hit 4t/acre with all the fertility from the stock. We grow mainly feed wheat and produce nearly all of our own seed."
The main spur for the installation was the fact that Bincombes facilities did not meet ACCS standards. "If we are going to sell wheat in future we are probably going to have to be in the scheme."
Costs have been kept down by re-using Bincombes 10-year-old Carier 14t/hr continuous-flow drier and a Kamas 20t/hr cleaner of the same age. "They were both in very good condition, but the 1960s building had had it," he says.
However, the 800t of bins there will continue to provide a home for the oilseeds, barley, milling wheat and seed. The former 1500t floor unit at Bayard will be used for fertiliser and general storage.
"With the decline in commodity price and the increase in fuel, fertiliser and spray costs I am hoping for a dramatic decrease in rents in the industry. Fortunately we have a landlord who fully understands agriculture.
"I am also lucky to have Peter and Phil Tewkesbury of Dorset Grain Services living only a mile from the new store. They have plenty of energy and 20 years of experience and have managed the project very efficiently."
BAYARDGRAINSTORE
• Extra land prompts decision.
• Co-op option equally costly.
• Simple on-floor wheat-only set-up.
• Export possibilities in future.