New feed store helps the balance sheet
An on-farm animal feed store that started out
as a way to supplement the income from pedigree
livestock sales on one County Durham farm is now
making a significant contribution towards profits, as
Wendy Owen found out
THE animal feed business and the other enterprise – producing high quality Charolais cattle and Texel and Suffolk sheep – complement each other perfectly, explains Steven Nesbitt. The store acts as a shop window for the livestock, with animals often catching the eye of farmers coming in for supplies.
With just 80ha (200 acres) supporting Steven and his brother, David, as well as their parents and one full-time employee, the brothers had been casting around for a source of extra income for some time when they had an idea.
"We were buying animal feed in bulk from Franklands feed merchants, which was renting a warehouse about five miles away and employing a full-time salesman. We thought we were in an ideal position to run that part of the business for them from home and they agreed that we could sell their products from the farm," explains Steven.
"The arrangement was that the company would set the feed prices but they would pay for advertising and marketing. Our part was renting them the building and manning the store in return for a monthly wage."
In 1996 the Nesbitts put up a 5000sq ft building at Alwent Hall Farm, Barnard Castle. The first year saw sales double and the business developed over the years until it was generating about one third of the farms total profits. Even after Franklands was taken over by Pyes in 2000, it continued to do well until the foot-and-mouth crisis.
"We had decided to expand and add another large building next to the original one so we could increase the range of goods and turn it into a country store, selling more products for horse and other pet owners," he says.
The building was finished in February 2001 at a cost of about £20,000 but the feed store had to be closed down almost immediately as F&M was rife in the area and a form D restriction was applied to the farm. This prompted a major decision by the Nesbitts, who decided to not to expand the feed store. They have since rented out the new building to a local company which is developing a prototype amphibious bus.
However the original store is up and running again and sales are at roughly two thirds of their previous level. The two parties have now agreed that the Nesbitts will get a percentage on the amount of feed sold instead of the rent and wages.
Mr Nesbitt predicts that this type of arrangement will become more popular on farms.
"The company we deal with has been very helpful and I can imagine that more farm-based stores will spring up as feed suppliers realise they can save on having to pay someone to work full-time in their stores," says Mr Nesbitt.
"I also believe that they improve trade for the feed merchant because a lot of farmers would rather hand their money over to another farmer than contribute to the profits of a large anonymous company."
Steven Nesbitt (right) says farmers like to buy from a fellow-farmer. Below: The feed store at Alwent Hall Farm.