Crop Storage Survey
In 2011 we conducted a Combinable Crop Storage Survey in partnership with SAOS. The main aim of the survey was to establish current practices and costs involved in drying, storing and marketing cereals and oilseed. The results proved both interesting 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 o er 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 identify current marketing practices amongst Scottish growers
- 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
FARM INFRASTRUCTURE
The study showed that the infrastructure on farms to dry and store grain was aging and in need of upgrading:
- Nearly two-thirds were over 15 years old
- A third 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.
- Only 44% of total production is stored on-farm in long term stores
- 36% 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
| Crop | Total Production | On-farm < 1 Month | On-farm > 1 Month | Central | Private |
|---|---|---|---|---|---|
| Feed Barley | 42,395 | 9% | 85% | 3% | 2% |
| Malting Barley | 29,535 | 65% | 31% | 1% | 4% |
| Feed Wheat | 14,675 | 14% | 79% | 1% | 3% |
| OSR | 6,135 | 20% | 66% | 8% | 3% |
| Oats | 1,775 | 39% | 48% | 1% | 12% |
CROP DRYING
The major deficiency identified was in the area of crop drying;
- On average dryers could only cope with 60% of combine capacity
- Many growers were incurring additional costs through the double handling of grain
- The extensive use (83%) of mobile and tray dryers were a concern as these are recognised as inefficient drying systems leading to higher costs.
REJECTIONS
A significant number of growers (23%) 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 | 26% |
| Moisture Level | 26% |
| Specific Weight | 23% |
| Infestation | 4% |
| Impurities | 6% |
| Temperature | 4% |
| Other | 11 |
INVESTMENT IN INFRASTRUCTURE
It would appear there is considerable investment planned for farm infrastructure. In total, 15% of the respondents stated they hoped to invest in new crop storage and handling facilities and 60% stated that they intend to repair existing storage. The high level of activity does confirm the need to upgrade existing farm infrastructure.
MARKETING
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.
ATTITUDE TOWARDS CENTRAL CO-OP 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 | 75% | Food Safety Compliance | 56% |
| Cost Savings | 72% | Improved Cashflow & Insurance | 53% |
| Wider Market Access | 64% | Financial Security | 52% |
| Reduced Market Risk | 58% | Ease of Management | 52% |
| Reduced Storage Risk | 58% | 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 and 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 and 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 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.