Benefit from best prices

6 September 2002

Time reducing service

BEDS grower Randy Davies believes the Strutt and Parker Best Buys Service saves him both money and a lot of time.

Since joining the service he only has to pick the best offer from the list and fax his order direct to the supplier. "That makes a big difference compared to ringing round six or so distributors for their best price."

He admits that he has lost points of contact within individual agrochemical suppliers, which were useful for other information. But he believes the savings more than compensate for that.

Mr Davies, who is a member of the merged Hayhill Farming Company at Clophill, Beds, used to belong to another buying group before switching to the Strutt and Parker service. "When I first looked at buying groups, I calculated there was a 9-10% annual saving by joining forces.

"In fact, the Best Buys Service probably saves me more than that. But it is difficult to be any more accurate unless you are monitoring prices all the time. And then you would lose some of the time-saving advantage."

He now buys almost all the agrochemicals he needs through Strutt and Parker. "In the first year, I put around 60% through the service and did the rest through another buying group. But it was obvious that the new service was more cost-effective."

He finds that having two prices on the list is very useful, especially if his need is urgent. "I will go to the closest supplier if I want to spray the product the same day. Otherwise I will use the cheapest one, as delivery is within 24 hours."

At busy times, Strutt and Parker updates the list on a weekly basis, which makes it possible to see how prices are moving, he adds.

"It is very rare not to find the agrochemicals you need on the list. Very occasionally there will be a particular product I am after which they are not sourcing." &#42

Next day delivery and a 10% saving

HERTS growers JW Pigott & Son have been members of the North Herts Farmers buying group since it was established in 1962.

Their reason for joining was clear. "It gives us much better purchasing power," says farmer weekly Farmer Focus writer Ian Pigott, who farms 690ha at Thrales End Farm, Harpenden. "In most circumstances, their price will be the best."

The North Herts Farmers group has three divisions – grain, agronomy and buying. Members can use any or all at their discretion. "The purchasing does not just cover agrochemicals," he adds. "We also get our fuel, building materials, spares and other items through the group."

Savings are estimated at 7-15%, depending on product. "Across the board, we will be saving 10% on a farm of this size," calculates Mr Pigott. That includes the commission charge, which is raised on each order, to cover administration costs.

Ease of buying is a big advantage, he says. "I just have to make a phone call. Provided I ring before 6pm, the chemical will be delivered the next day."

As the delivery drivers have the code to the spray shed, Mr Pigott does not even have to be there to take delivery. "It is very convenient. Everything is covered by one phone call."

He still does some researching of agrochemical prices at key buying times. "That is a hard habit to break. And it usually just confirms that we are getting the best deal. There are a number of suppliers for each item, so we can be sure of getting what we need."

A recent comparison of agchem prices between 15 members of his local grain group made him aware of the huge differences that there can be for the same product. "And that is for farms in the same vicinity. It showed us all that we must remain vigilant."

Not dealing with individual distributors has also been a benefit, he concludes. "As we use an independent agronomist we know what chemicals we need to source. So there is no chance of being sold something because they have a surplus of it, or having to use an inferior product."

Ian Pigotts habit of checking prices confirms that the deals he gets from North Herts Farmers are usually the best.

Benefit from best prices

Driving down the cost

of inputs is a key goal for

all farmers. Joining a

best-buys pricing service or

a full-blown buying group

can bring big benefits as

Louise Impey explains

BEING a member of a buying group could save you as much as 15% off the farms annual agrochemical bill, says Charles Ireland of Strutt and Parker, who runs the firms Best Buys Service.

As well as the financial benefit for farmer members there is also a big reduction in time spent researching and negotiating prices. "And there is total transparency in the system, so it is absolutely clear what the final bill will be."

Mr Ireland sources prices from eight to 10 chemical suppliers on a regular basis, and then compiles a list with the best and second best price for each particular product.

The list is circulated to the 45 growers who make use of the confidential service. "The farmer then orders the chemical himself from the relevant distributor and it is delivered direct to the farm within 24 hours. The price quoted is the price paid."

Strutt and Parkers Best Buys Service evolved out of the expansion of the firms agronomy and management services, says Mr Ireland. "In that way it is different to other buying groups which charge commission on each order. This is part of the service to our agronomy and management clients, which also includes seeds, fertilisers, fuel and spares."

The savings come from two sources, he believes. "First, there are economies of scale. We are buying for 60,000 acres of arable land and have developed good relationships with the main suppliers. Second, we are not using more expensive, co-formulated products where they are not necessary."

As well as combinable crops, the list covers root crop herbicides and fungicides, trace elements and PGRs. "There is no need to go elsewhere for a price in most circumstances," says Mr Ireland. "And flexible payment terms with suppliers are also possible."

See more