New storage payment model from Craven Grain

Craven Grain Storage, the farmer-owned grain store near Leominster in north Herefordshire, is to waive the joining fee usually required from new members in return for a three-year commitment to the business. 

 Dale Payne and Craven Grain chairman Tony Hall

Dale Payne and Craven Grain chairman Tony Hall

 

Managing director Dale Payne describes the decision to offer storage in return for a minimum term commitment as the basis for a new model for central stores. He says the business can offer new farmer members the same £8.50/tonne storage and handling charge paid by existing members due to its financial strength. 

“The store is in a strong position due to sound financial management in the past. With current cereal prices at around £100/t, we recognise that spending the equivalent of a tonne of wheat on new storage is just not viable,” he states.

 “Past expansion has relied on members making loans or capital investments, but through good financial prudence and ensuring we have demand for the new capacity it is possible to have a self-sustaining model.”

Craven Grain is currently adding a further 8000 tonnes storage to bring its capacity to 40,000 tonnes, with a further 4,000 tonnes under consideration. Around 6,000 tonnes of the additional space has been taken up by new members from the neighbouring counties of Shropshire, Gloucestershire and Monmouthshire, with marketing partner Openfield Agriculture also taking part of the new tonnage.

Posted on June 7, 2016 and filed under Company News, Grain Trading.