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Storage Survey

In partnership with SAOS, we conducted a Combinable Crop Storage Survey in Angus and Fife in 2011. The aim of the survey was to establish current practices and costs involved in drying, storing and marketing cereals and oilseed. The results have proved both insightful and potentially far reaching. The results highlighted some interesting findings that show the industry still has a long way to go to provide the necessary infrastructure to offer the consumer the consistency of product now being demanded. Growers also must have the correct infrastructure to be able to move and dry product to the required levels efficiently as well as improve their overall marketing ability.

Study Objectives
  • To determine the status and conditions of on-farm infrastructure for combinable crops in the study area
  • To determine future storage needs and investment intentions
  • To identify current marketing practices amongst Scottish growers
Farm Infrastructure

The study showed that the infrastructure on farms to dry and store grain was aging and in need of upgrading.

  • Over two-thirds were over 15 years old
  • Some 37% were over 30 years
  • The majority of grain drying, handling and storage systems were designed 20 years ago

Investment has been made into harvest capacity (combines) over recent years to reduce harvest risk but there has been little investment in crop drying, handling and storage systems.

Storage

The following table shows where the various crops produced in the survey are stored

  • Two-thirds of total production is stored on-farm in long term stores (> month) 
  • 30% of production is stored in temporary stores (less than month)

Some 30% of respondents stated their farming operations were constrained at harvest time due to the capacity and quality of their storage facilities.  It can be argued that growers are unable to market their crops to full advantage unless they can safely store it beyond the immediate harvest period.

Crop Total Production On-farm less mth On-farm > 1 mth Central Private
Feed Barley 31,821 16% 88% 1% 2%
Malting Barley 63,265 72% 23% 3% 1%
Feed Wheat 101,570 7% 93% 1% 1%
OSR 10,077 47% 40% 11% 3%
Oats 16,496 12% 87% 1% 2%
Farm Crop Drying

The major deficiency identified was in the area of crop drying: on average dryers could only cope with 60% of combine capacity and many growers were incurring additional costs through the double handling of grain

Drier type breakdown:

  • Mobile 45%
  • Continuous 30%
  • On-floor dryer 6%
  • Tray 5%

The extensive use of mobile dryers is a concern as these are recognised as inefficient drying systems leading to higher costs.

Marketing

Marketing is an important component in the overall financial performance of a crop. There is a wide range of marketing methods available to growers including; contracts, pools, futures, central stores and ‘spot’ markets. The survey revealed that ‘spot’ marketing is still the most widely used marketing method even though it carries the most risk with little prospect of growers maximising the value of their crop.

Rejections

A significant number of growers (41%) also had experienced rejections or penalties with their crops in the last three seasons. This is a significant cost to the industry and is never recouped by the grower.

 

Reasons for Rejections

%

N Level

29%

Moisture level

19%

Specific  Weight

19%

Infestation

6%

Impurities

1%

Temperature

1%

Other

24%

Investment in Infrastructure

It would appear there is considerable investment planned for farm infrastructure. In total, 16% of the respondents stated they hoped to invest in new crop storage and handling facilities and 39% stated that they intend to repair existing storage. The high level of activity does confirm the need to upgrade existing farm infrastructure.

Attitude Towards Central Storage

The following table shows the ranking of factors that would influence growers to invest in central storage. The top four factors for both groups in order of priority was: ‘improved returns’, ‘cost saving’, ‘wider market access’ and ‘reduced marketing risk’.

Factor

Score

Factor

Score

Improved returns

80

Food safety compliance

58

Cost savings

76

Improved cash flow & Insurance

55

Wider market access

64

Reduced storage risk

54

Reduced market risk

60

Ease of Management

51

Financial security

59

Access to drying & storage

48

 

Conclusion

There is a major gap between existing infrastructure and that required to produce the consistency of product demanded by the consumer. Whilst over half of respondents planned on making capital investment in storage & processing facilities, a thorough review of all of the options available should be undertaken before doing so.

A stand alone farm solution may not address all of the needs of future cereal supply chains & be able to capture the true value for producers. Many growers are unaware of the true cost of on-farm drying and storage. That together with increasing numbers of rejections and allowances as demands of the food industry increase adds even more cost for the producer.

In order to be able to secure maximum profitability in the future for growers, a greater strategic integrated partnership is required. Volatility in the market and challenging weather conditions will continue to add stress to these issues and now is the time for growers to address them. There is a real need to increase the understanding and awareness in the industry of the full range of alternative options for drying, storing and marketing combinable crops.

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