Hundreds of farmers attended ADM Agriculture’s recent series of breakfast meetings, keen to get hear more about the company’s developments since its creation 12 months beforehand and how it could benefit their businesses.
In addition, guest speakers from the other parts of ADM, the AIC and businesses such as RAGT and Sentry outlined some key developments they were undertaking and how their close relationships with ADM were helping to take them forward.
The meetings were the first of their type to be held by ADM Agriculture since it was created from the combined businesses of ADM Arkady, Gleadell, ADM Direct and Dunns in February 2019.
ADM Agriculture director David Sheppard provided fresh insight into parent company, ADM, and its subsidiaries. He emphasised the benefits of dealing with a company with global reach and its own dedicated supply chains to optimise marketing decisions while minimising risk.
David said key supply factors such as crop area and weather had undergone significant shifts in major producing regions of the world, which was having a major bearing on the 2020/21 marketing season.
A raft of other complex factors had been thrown into the mix, including significant political events such as Brexit, the China/US trade deal and new UK agricultural policy, together with more extreme currency movements and the unknowns of coronavirus.
“I do feel that we face a period of unprecedented uncertainty; we will perhaps see more change than ever before,” he said. “These are complicated issues that are developing as we speak, and no-one can be sure of the outcome.”
“As far as the UK is concerned we are going to see a period of flux in the near future. We are looking at a much reduced crop – that will impact some companies badly, so it is very important to pick who you trade with.”
ADM has a strong presence in the UK, employing over 1200 people with a $2.3bn annual turnover. Businesses include ADM Milling, one of the UK’s largest flour millers, the rapeseed crushing plant at ADM Erith, Europe’s largest single-seed crushing facility, and ADM Agriculture.
ADM Agriculture deals with over 6000 farmers and works closely with ADM’s UK businesses, many other leading UK processors and end-users and their customers, as well as selling grain, oilseeds and pulses on the domestic and export markets, providing multiple marketing opportunities to help maximise on-farm margins and logistics.
It is also a major distributor of fertiliser, seed and feed to farmers and wholesale customers and operates a leading pulse and seed processor based in Long Sutton, Lincolnshire.
“Our job is to help you manage risk,” said David. “We have access to some of the best market intelligence in the business, providing growers with a comprehensive view of fundamental and technical analysis.
“We offer a range of marketing solutions including a wide range of pools, buyback and futures-linked contracts as well as flexible storage packages enabling growers to decouple marketing from movement.”
The benefits of working with ADM in the UK were very significant (see panel), not least offering direct access to its milling and rapeseed processing facilities and other key markets, backed by blue chip financial status, he added.
“But above all, we have a great trading team working in the UK, Europe and globally, which means we get excellent market information, which we can use for the benefit of our farmer customers.”
ADM Agriculture – key benefits for farmers
- A long-term player in UK agriculture
- Direct links into key end-consumption – in house and third party
- Blue chip financial status
- Internationally connected to all key markets
- First-hand market information
- Professional staff throughout the business
- A trusted, innovative and stable trading partner for UK farmers
- Optimal trading account management – ADM 365 online portal now live.
Freddie Humfrey, ADM Agriculture’s national feed wheat trader, updated the audience on ADM’s latest thinking on the domestic market outlook, predicting that this season’s wheat crop area could be one of the lowest for 40 years.
“We have used a figure of 1.3-1.4m ha of wheat in the ground, but that will probably come down. We think the crop will be around 10mln t.” That, plus a high ending stocks figure in the region of 3.1mln t, plus imports of 1.75mln t, pointed to a total availability of 14-15mln t of wheat for domestic use, down 4-5mln t on the year.
“Maize imports will rise, more feed barley will be used in animal feed rations, we’re not going to have any wheat to export,” Freddie said. “Maize and wheat are now calculating into northern homes. The UK has the capacity to import significant volumes every month. This is not where we want to be – we want large crops in the UK, but that’s not how it is this season.”
The wider global picture, rather than domestic weather-related issues, was setting the UK market tone. Globally, ending stocks for the current season looked healthy.
“What could change the outlook? We need the weather to change somewhere else in the world, we don’t need coronavirus – that is not a bull signal – and a period of very cold or hot and dry weather could be a game changer for winter crops in Eastern Europe and southern Russia.
“In addition, spring crops worldwide have not yet been planted. So there is a long way to go until harvest before we can say with certainty where the market is going,” said Freddie.
“If you do have wheat in the ground and it looks alright, then £150-160/t for new crop wheat is not a bad price. We’ve only been to £200/t twice in the past 15 years, and I’m not sure we will get there this coming season.”
Joining forces to develop new genetics
ADM is an important partner for plant breeder RAGT Seeds, helping to test and commercialise new varieties that can benefit the whole supply chain.
That was the message from RAGT managing director Simon Howell. “We work very closely with ADM in taking varieties and new genetics forward.
“They work very closely with their farmers, but also join up with end users, whether for malting barley, oilseed rape or milling wheats – they are always testing our new genetics coming through to see if there is any value in them and whether they can get premiums for their farmers.”
This provided an important testing ground for new breeding developments throughout the supply chain, said Simon. “We don’t see ADM as a client, but as a partner to take new genetics forward, which is key for us as a company.”
It is important for ADM too. Working closely with RAGT and other plant breeders gives the company a valuable insight into varieties early in their life, enabling them to multiply up those with promise, securing supplies early on for their farmer customers.
One such variety is RGT Wolverine, Europe’s first winter wheat resistant to barley yellow dwarf virus, offering growers an alternative to chemical control for the first time.
Simon said the variety was capable of delivering exceptional yields even in the absence of BYDV and was backed by a strong agronomic package, so growers would not be penalised for choosing it in low-disease years.
“RAGT is the first breeder in Europe to offer a BYDV-resistant wheat, and the trait is now successfully established in some of our elite material. RGT Wolverine has yielded exceptionally well over five years of trials and is capable of competing with the best varieties on the Recommended List, even when there is no BYDV to be seen.”
RGT Wolverine’s resistance originates from a goat grass, Thinopyrum intermedium, a distant wheat relative. Rigorous testing by RAGT plus commercial experience of resistant varieties in Australia suggest the resistance is durable. “This has given us the confidence to introduce it into the European market,” said Simon.
Limited quantities will be available from ADM Agriculture this autumn.
A growing partnership
For the past five years, Sentry, one of the largest farming companies in the UK, has been growing its partnership with ADM Agriculture, working closely together to add maximum value to its combinable crops with minimum risk.
The relationship is based on careful market assessment, encompassing global, European and UK supply-and-demand market structure as well as varietal selection, end-consumer requirements and cost of production analysis.
“We used to deal with 32 companies and the risks were colossal,” said Sentry managing director Paul Christian. “We now deal with seven, including some smaller companies for specific contracts, but the majority of our business goes to ADM.
“Why ADM? It’s about people – ADM and Sentry are just two company names but people deal with people. We communicate regularly, openly and transparently with the team at ADM and it works really well. We get very good strategic sales advice.
“We’ve been using pools in the past, the ADM/Sentry pool has worked well for us. ADM is aware of our specific marketing parameters and can react quickly and effectively, using its wide knowledge and expertise much more quickly than we could, especially during busy times.
“We are also interested in novel crops and opportunities. If something comes up we want to be included – we want to be involved.
“In the end, it comes down to trust – it’s number one,” says Paul. “We trust ADM and they trust us and we openly share information – it really is a very good relationship.”
As well as making its sales process more resilient, Paul explained that Sentry was also working hard to make the production side more robust, with a particular focus on soil health.
Sentry has adopted a six-point plan to help look after soils:
- Increase plant and animal matter returns
- Improve soil health monitoring
- Promote soil diversity and organisms
- Promote continuous plant cover where possible
- Reduce soil action (a huge cost to the business)
- Improve rotations by including pulses, livestock and multi-species cover crops to increase plant diversity and speed up soil restoration.
“It’s quite exciting,” said Paul. “We’ve had to unlearn some things we were taught – they are not right for the day.
“We now look far more closely at our soils. We’ve been using Agrovista’s soil health programme to help improve soil management and we’re really focusing on it.
“We don’t believe the ‘conservation or conventional’ hype – we are custodians to our farms, and we will use the best options available to restore their soils and make them more resilient.”