Grain Marketing Pools

from Farmers First | Issue 57 - Autumn 2020

News

The 2021 harvest pools will launch on 1st October, so now is a good time to look at what this service offers to members and the benefits that can be achieved.

Pools have been offered to members since Fram Farmers established a grain marketing service, and very much works with the cooperative spirit of working together. Historically, some farmers have been reluctant to change the way they market their grain, however, a proven track record of achieving top quartile performance provide a powerful incentive to reconsider. Farmers invest a great deal of time, effort and money in growing crops so it makes sense to maximise returns by marketing them more effectively. WHAT IS A POOL? Fram Farmers pools provide a very simple, safe method of marketing grain and generate consistently above-average returns without the considerable risks of ‘spot selling’. New this year, members can now commit the produce of an area, as well as the usual commitment by tonnage. Managed by grain market professionals, the day-to-day marketing decisions are taken care of by our team, providing the opportunity to add value with premiums where applicable, a choice of payment dates, access to advance payments at

favourable rates, credit insurance on sales, a storage option and flexible haulage arrangements. What’s more, they are supervised by a committee of representatives from Fram Farmers and ADM, who collectively have tremendous knowledge of grain marketing, farming and agronomy. The committee sets the

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sales strategy and monitors pool performance to ensure that members derive maximum benefit.

Our partnership with ADM gives us the inside track on global trends, world stocks, yields, tonnages traded and market requirements, which has proved extremely helpful in volatile markets over many years. We offer a wide range of marketing options, so it is advisable to call the office and discuss your individual circumstances.

We currently offer four pool periods for combinable crops - a ‘harvest’ pool covering crop movement in August and September, 1 October to 31 December, 1 January to 31 March and 1 April to 30 June.

Members can commit either a tonnage or hectarage, and need to specify the varieties at the time of commitment. All grain is tested after harvest and farmers are paid premiums where applicable. Farmers confirm the quantity and storage location after harvest.

Grain is generally stored on farm, but we can arrange collection and storage if required. Offering advance payments for up to 75% of the value of the crop at competitive interest rates if required, final payment is one month after the end of the movement period. As little as four loads are required to join the pool, and members can call at any time to find out the current position (percentage sold/average price etc). NEW COMMITTEE MEMBER, DOUGLAS INGLIS Pool selling strategies are devised and monitored by Fram Farmers staff and directors, together with senior members of the ADM Agriculture trading team. Douglas Inglis was appointed a director Douglas Inglis of Fram Farmers in February and joined the grain marketing pool committee in mid-April. “This committee consists of 9 people; 3 Fram Farmers Directors, 3 members and 3 traders from ADM, including David Sheppard, a director of ADM Agriculture,” he explains. “The committee has a fortnightly call to discuss this essential information, which enables us, as a collective, to make informed decisions in terms of trading.

MEMBER EXPERIENCE

Graham Warburton, of Hatley Farm, Cheshire, used the pools for the first time last year to market his wheat, and was pleased with the outcome, so much so that he has entered both wheat and barley into the pool this year. “The harvest pool paid out better than the spot price last year, so we decided that it was the best way forward again this year.” “We work closely with a representative at ADM, who knows us well and visits regularly. We discussed our options, together with predicted tonnage and completed the paperwork,” explains Graham. “I find that the pool system takes a lot of pressure off deciding when to sell, and leaves me more time to concentrate on managing general farm operations. The grain collection is well organised and flexible to fit around what else we have going on too.” There is a deep level of analysis involved to provide this service to members, and the committee plays a large part in this process. “It is very much a strategic approach and the degree of knowledge and experience is a huge asset to members, which I feel is important to emphasise. Having this resource is an exciting benefit for members and one that adds value to their businesses. This strategy is clearly working well, as the results of the Fram Farmers grain marketing pools have performed well against competitors. “Particularly given the difficult winter and spring we had this year, this service has been very useful to members in providing yield information and managing expectations. Looking ahead, with the unknown changes in global markets and UK trading agreements, the benefit of this experienced team will be even more important.” All Fram Farmers members will be sent forms to complete if they would like to sign up for the 2021 pool. Contact the office for details on performance of the pools against competitors and further information:

01728 727720.