PR Wormell Farms
Managing the 600ha combinable crop enterprise in North East Essex, Dan Wormell, of P R Wormell Farms, Colchester, is looking to maximise efficiency and manage risk and volatility across the whole farm, making best use of his time out on farm by working with CRM Agri-Commodities and using Graintab, to take the pressure off grain marketing and maximise profits, through grain marketing tools including futures and options – With an average price over the wheat tonnage 10% better than their target and OSR 13% above their targeted price, the results speak for themselves.
Dan, 34 and a Writtle University College MSc graduate, explains: “With just myself, one full time farm worker and one harvest worker, I don’t really have much time to be in the office; so knowing that CRM Agri Commodities is watching markets and constantly analysing the situation takes some of the pressure away. A phone call to say yes now’s a good time to commit another 10% means I can focus on other tasks knowing that side of things is taken care of as much as it can be.
“CRM Agri Commodities’ independence is absolutely crucial in my mind. I need to be able to fully rely on the advice I take from them and that there isn’t a vested interest behind it. Paying the annual subscription means that there is only one upfront fee, which helps with managing cashflow and budgets.”
Dan continues: “Without CRM Agri I wouldn’t have been able to confidently apply the strategy we now have in place, which is working very well for our business. The way that they have listened to some of my more progressive ideas and been able to adapt these into a workable plan for our business is impressive. Through this, CRM Agri has affected all areas of our business really because we have taken a different approach to risk, volatility and efficiency across the enterprise, in which they play a big part.”
P R Wormell Farms, which incorporates a 70 acre solar panel enterprise and Wormell Plant Hire, run by Dan’s father Steve, and each year they harvest approximately 2,500T milling wheat, 500T OSR, 250T beans and 50T linseed. The business also leases out two 11,000sqft flat stores after seeing that they were largely left unused or not filled to capacity with the farming enterprise. Dan says: “This left us with one flat store of 11,000sqft to store all of our harvested crops, bulk fertiliser and some machinery. The only way that this was going to work was if we sold everything at harvest, so that by November we could start taking delivery of bulk fertiliser, which we buy in quantities of 200T and turn into liquid fertiliser on farm.”
Three years ago, Dan made the decision to work with CRM AgriCommodities: “At the same time as we leased out the sheds, I started to use CRM. I explained my strategy to my advisor and why we were doing it; we talked it over and the more we did the more obvious a decision it became. Not only were we going to be receiving additional income from renting out the two stores but we could also at the same time take a lot of risk out of our crop marketing.”
Dan continues: “We now sell everything for harvest movement, which involves approximately 70% being forward sold throughout the preceding year, with the rest being sold spot harvest. Yes, we may lose out on a percentage in the harvest spot price dip, but by the end of September we have sold 100% of our harvest and we have taken all downside price risk out of the marketing of the grain. We know that we have secured that year’s production at a profit.”
One of the benefits of working with independent grain marketing analysts CRM AgriCommodities has been the use of tools including options. Dan explains: “Before I started using CRM Agri I had always been interested in futures and options but didn’t fully understand them. But options are simply just price insurance. When I buy an option I am paying an insurance premium to hedge the physical sale in case of the market rallying, in the meantime I have had 100% of the cash from the harvest, have rental income from the other stores and know that the latest harvest has made a profit.”
As well as making use of his annual subscription to CRM Agri Commodities’ independent and bespoke marketing advice, Dan has also attended one of the several grain marketing courses that CRM Agri run each year. “I have attended a grain marketing course with CRM Agri before and found it to be very helpful. All the attendees were given a folder to take home with very clear explanations of different terms and how they work, whilst the tasks that we completed were useful and I still have the folder to hand if I am unsure on anything. Another really positive for me is their annual conference, It’s a good chance to meet some very interesting and forward thinking farmers who I have found are all very happy to talk through there situations and how they are using CRM AgrCommodities.”CRM AgriCommodities’ strategies have continually beaten market averages, whilst managing risk and price volatility remains at the core of every decision.
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