Co-operation : The grain of truth

Chris Berry talks with Paul Bartram & Bill Steel of Shire Grain

One of the most successful farmers’ co-operatives in Yorkshire, in recent times, has been Shire Grain. “We’re one of the smallish co-operatives,” says Bill Steel who farms at Methley and whose late-brother Mick was one of the instigators of the collaboration.

“It’s funny because co-ops seem to do well down south and up north but Yorkshire seems to struggle. I think that’s because some will always believe they can do things better for themselves than anybody else, but it’s definitely been a benefit to us because at harvest time we can get on with harvesting and getting better crops back into the ground. There’s nobody stood in a yard having to watch a dryer. It’s just a matter of the corn going into the shed and lorries coming to send it on its way.”

Last year’s exceptional prices were good news for all grain farmers and Shire Grain performed well for its members too. “We finished up with a fairly decent average price and at the end of the day it is the average price that counts, not what you sell a few loads at. There were some farmers who missed out on the really good prices that came about because they had sold forward, and we missed some of those prices too but we still sold some at £191/tonne and our average wheat price was £147/tonne.”

Bill and his brother, Mick, had seen what was coming two decades ago and were certain that co-ops were the way forward. “At the time, the smaller grain merchants were disappearing and we could see that the bigger ones would dominate the market. The old grain dryer and grain bins we had needed replacing and at the price they were going to cost we started looking at doing something different. That’s when we began looking at getting together with other farmers to put up big capacity drying and storage facilities.”

Bill believes that a lot of farmers might do well to look at their own farms at present, especially given the increase in prices they have recently received for their crops. “A lot of farmers will be ploughing money into tractors and new equipment and probably even looking at purchasing a new grain dryer. But the price of putting up either a new grain store or drying facility would mean most farmers would be better with a co-op. We’ve had a few calls just recently from farmers who are interested in joining us. The only stipulation we make is that they must be Farm Assured as we have gone down that route now to assure quality.”

Paul Bartram farms at Barmby Moor and is both the store manager and chairman of Shire Grain. Whilst he agrees with Bill over the perception that some Yorkshire farmers have of ‘paddling their own canoe’ he believes there are real benefits that those who are not currently members of Shire Grain are missing out on. “The idea of central co-operative storage of grain is still very difficult to sell to some Yorkshire farmers. Currently the English Food & Farming Partnership is conducting a survey to find out how we can grow that as we are the only co-operative grain marketing company with a central store. One of the things that marks out Shire Grain though, is that we have only one seasonal pool. Other farmers either receive harvest, short or long term pool prices.

“If you were in a short term pool last year, as some were, and only got the price from harvest through to September a lot of that was sold well before harvest when prices were a lot lower than they eventually got to. It wasn’t until harvest that the price went beyond £100/tonne. Of course the best time to be in last year, with hindsight, was in the short-term between September and Christmas, as the best prices were probably achievable then, but not everyone will have committed to that. That’s why an average through the season offers you better odds.

“The other thing with pools is that you generally get absolutely no cash flow until the end of the pool, so to counter that you have to be in some early or harvest pools. What we do at Shire Grain is different to that and really helps our members. We lend money to our farmer members at a very competitive rate of interest against the value of their crop in store. We do this on a long term pool and that means we generally get the best of both worlds - regular money for our farmers and a better annual average. We pay 40% of the value at harvest, another 25% in February and a further 25% in May with the balance being paid in December.”

Paul now feels that grain farmers are well placed, and that perhaps now is the right time for more to join a co-operative like Shire Grain. “There is currently a world shortage. We have been producing less wheat and less grain for about the last five years partly because prices for commodities haven’t been good enough. It’s only in this last year that they’ve really started to move forward and you can see that as commodity prices are rising it is now well worth growing.

“We can store across seven individual bays here at Pocklington which means you don‘t have to reinvest huge sums in your own storage facilities. We never own the grain, it always belongs to the farmer. We sell as an agent on their behalf and we believe that future growth from our existing membership of around forty farmers will come when the mindset of individual farmers is right. At the end of the day you have got to have people who see the benefits of storing grain with you.” Shire Grain has been trading since the late 1980s and is a prime example of what can be achieved through co-operation.

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