Stratford grain store expands market opportunities
Arable farmers across the West and Central Midlands have been given a boost ahead of harvest after the 27,000 tonne grain store at Stratford-upon-Avon operated by Arable Crop Storage (ACS) had its application to merge with a store in Cambridgeshire approved by the UK Financial Services Authority.
Following a review of the business in 2010 the board of directors at ACS concluded that a merger would be the best way for it to deliver the level of service and market access needed by members.
With ACS already part of the OpenfieldNetwork of stores the decision was taken to approach Camgrain, a fellow member of the Network and the UK's largest farmer-owned central storage business, to consider how a merger could unlock value for members.
The Stratford Advanced Processing Centre (Stratford APC), as it is now known, has become the fourth site in the Camgrain operation sitting strategically alongside two stores in Cambridgeshire and a new 70,000-tonne facility at Kettering, Northamptonshire that will be operational for harvest 2012.
The merger, which was completed in mid-May, will secure access to more valuable markets meaning growers across the region can invest in their businesses with greater confidence.
The merger of ACS with Camgrain is a significant step in the continued development of the OpenfieldNetwork, the central store alliance that covers England and Scotland. Expansion this year of 14% before the recent merger is delivering value for growers and the consumer customers they supply.
Once exploratory discussions were concluded last spring Camgrain were invited to manage the store for harvest 2011. The 63 ACS farmer members, covering an area from Buckinghamshire to Worcestershire and the Cotswolds, noticed an immediate improvement in the level of member service.
One of the first steps in harvest 2011 was to extend opening hours to 24-hours a day, seven days a week to enable more efficient movement of grain from farm during the peak of harvest, says director Jo Robinson, who farms at Brackley, Northants.
"With modern combine harvesters capable of clearing 300 tonnes or more of wheat a day, our members required a level of service that reflected their needs. The programmes we have initiated since working with Camgrain have supported that," he says.
While the improved service was greatly welcomed an additional benefit to members has come from improved access to markets. "A major attraction of Camgrain as a partner was its reputation for delivering quality grain to end-user specifications which has enabled it to secure contracts for its members with high guaranteed premiums," says Jo Robinson.
For organic growers the Stratford APC will be registered to handle crops from harvest 2012 onwards, offering a valuable facility in close proximity to both growers and primary processors of organic crops.
With access to other stores in the Camgrain network, crops such as malting barley, used to make beer and whisky, can be moved directly to the store closest to the point of use which helps improve efficiency levels across the supply chain.
"Before the merger malting barley was a crop beyond me as I wasn't able to store it in the manner necessary to retain quality and secure the full premium. Now, my malting barley is moved directly to Camgrain's specialist Malting Barley store at Linton, Cambridgeshire, located on the doorstep of England's malting industry, where it captures its full potential value", he says.
"When you look at how the supply chain is evolving and how end-users are focusing investment activity on producing finished goods, rather than on commodity storage Camgrain recognised that to protect our routes to market we needed to develop a model that moved us up the supply chain and brought us closer to the customer."
"The Midlands is home to some of the biggest names in baking and flour milling and the investment we have managed to secure following the merger will ensure we are able to upgrade facilities and deliver the raw product as demanded by the end-user. This will ensure we are able to satisfy those markets for quality grain on our doorstep," he adds.
While the opportunity to secure top premiums from the market is likely to stimulate interest in both existing and future members, Jo Robinson stated that by merging with Camgrain the membership of ACS, now Camgrain members, enjoy a greatly improved level of protection from both weather and crop price volatility.
"The weather is a farmer's greatest foe and many decent crops have been ruined by a wet harvest. The guarantee that a member can harvest his crop, even at higher than average moistures, in order to secure grain at optimum field quality and then have the cereal moved within 24 hours to a high capacity processing facility to stabilise and dress the crop to best advantage is key to success in modern markets. It is the way to secure market premiums and creates a win-win situation with our key customers.
"This is more than just off-farm storage; it is a dynamic marketing and storage arrangement that reduces the risk to the farmer while capturing more value from the supply chain for UK farmers," he concludes.