In-house analysts and unparalleled understanding
Price volatility, changing demand, new markets, political upheaval and global weather patterns are just a few of the factors that can make growing grain seem much easier than selling it these days.
Setting aside the unpredictability of the weather, getting it right needs not just skilled farming practices but an unparalleled understanding of global politics and market forces allied to the insight that comes from many years’ experience in a highly specialised environment.
For those who have all the know-how they need to grow a bumper crop of premium wheat and don’t want to risk losing out by selling it at the wrong time or the wrong price, help is at hand in the form of specialist grain trading business Cefetra.
Cefetra Grain, which pitches itself as a national trading business with a local presence and has recently expanded its Kent operation, sees itself very much as partnering with farmers, using its market expertise to work with them to get the best price for their hard-won crop.
As Simon Wilcox, UK Farm Grain Origination Manager, explained: “We work with farmers to understand what they are growing, what facilities they have to store it, what their cash flow needs are and when they want to sell their crop.
“We don’t impose contracts on our clients, we just work with them to tailor the best deal for a win-win scenario while taking into account all the factors they need to think about.”
Cefetra’s scale – part of a group with a turnover in excess of €16bn and a balance sheet value of around €1.44bn – means it has significant flexibility in finding a home for the grain it buys. “We can hedge the price against future market changes and we have a range of options for finding buyers,” Simon explained. “We also have storage facilities in Kent, Oxfordshire, Somerset and Southampton.
“As an independent trading partner, we pride ourselves on finding the best outlet for our clients’ grain and on working in partnership to achieve their goals. We focus on long-term relationship building backed up by our strong, multi-national foundations.”
Cefetra also benefits from an impressive history, with roots that go back to 1778, when William McCorkell and Co was set up. By 1988, McCorkell Ltd was importing animal feed materials into North and South Ireland from around the world.
In 1999, Cefetra Bv, a trading firm based in the Netherlands, invested in McCorkell Scotland as a supply chain partner and Cefetra Ltd was born.
Now a major importer of agricultural raw materials into the UK and Ireland as a supplier to the feed, food and fuel industries, Cefetra is part of the BayWa group, a multi-national company founded in Munich in 1923 and the largest agricultural co-operative in Europe.
“As part of an agricultural co-operative we are able to take a long-term view, focusing on steady growth in partnership with our clients rather than having to answer to shareholders looking for a quick profit,” Simon explained.
That global scale also supports Cefetra’s customers, who benefit from the insight of the company’s trading analysts around the world. The central trading team of 16, based in Glasgow, is in constant contact with colleagues worldwide, giving Cefetra the edge when it comes to understanding the market’s direction and opportunities.
“Having our own analysts focused on the markets all day every day is a huge advantage when it comes to getting the best deal for the farmers we work with,” Simon commented.
Simon became part of the company when Cefetra bought the Wessex Grain co-operative he had been heading up as managing director in 2017. “Cefetra was looking for a domestic grain origination arm and I felt that Wessex Grain needed to be part of something bigger,” he explained.
While it may be bigger than Wessex Grain, Cefetra is still focused on local relationships, with hubs across the country keeping in regular contact with the farmers they work alongside. Offices in Folkestone in Kent, Sudbury in Suffolk, Great Tew in Oxfordshire and Henstridge in Somerset are central to a network that looks after around 4,000 arable farmers.
While the Glasgow team monitors prices and finds buyers for the grain, it is the local teams who keep in close contact with the farmers, alerting them when key price points are reached so that they can discuss the best time to sell. “It’s not always about price, of course,” explained Simon. “It can be about freeing up space in the barn or bringing in cash to support another project. Whatever the farmer needs, we are here to help achieve that aim.”
Cefetra’s size and healthy balance sheet gives the company flexibility, as does the fact that it also deals in other markets such as soya and co-products. “The markets can be very volatile and smaller traders can’t afford to take risks on a small balance sheet,” Simon said. “We’ve seen a couple of instances of that causing big problems for the industry recently and farmers do need to choose their grain merchants carefully.”
Cefetra currently has 28 buyers across the country in regular communication with clients and looking for new farmers who want the security of a national grain trader but with a local approach. The Cefetra team can also advise on quality and help with testing crops, again with a focus on achieving the best price for the client.
The Kent office was established two years ago by experienced and locally well-known farm grain traders Charles Roberts and Tim Porter. They have added to the team, with Steve Carter, Robin Bugden and most recently Emma Walsh all now working to expand the business.
As the new hubs grow and new farmers join the operation, Cefetra, which currently purchases more than 1.3m tonnes of grain per annum across the UK, is continuing to grow organically.
The company purchased Premium Crops in 2018, adding a specialist business that invites farmers to grow crops such as high erucic acid rapeseed, linseed, canary seed, millet, red wheat and naked oats under contract. “This is a niche part of Cefetra’s operation, but it offers a great opportunity for farmers to add high-margin specialist crops to their rotations,” said Simon.
“Premium Crops provides agronomy support and offers a premium price that’s agreed with the farmer up front.”
Cefetra can also support farmers with export opportunities for their grain, using their European sister companies to find a home for UK grain. The company exports out of many ports around the UK including Dover and Rye in Kent and from Southampton and Poole.
It can also offer regional storage facilities which offer farmers prompt harvest movement and peace of mind over quality on intake. The stores are available in Kent, Suffolk, Oxfordshire, Hampshire and Somerset.