How are grain processing enterprises faring this summer
Affected by a combination of factors such as rising grain-growing costs and sluggish market consumption, many grain processing enterprises are facing high operating costs, insufficient operating rates, and declining profits. In the face of adversity, many enterprises are resolving cost increases through multiple measures such as increasing warehouse capacity, stepping up technological upgrading, and researching and developing new products, while intensifying efforts to expand markets. Experts suggest that, with the domestic grain market in a "buyer's" market atmosphere, grain processing enterprises should use the price discovery mechanism of third-party grain trading platforms to reduce grain source procurement costs through competitive bidding and avoid capital risks.
"Hurry, hurry, hurry, help me unload all the wheat, I still have to go back and load another truck!" Recently, as soon as Geng Zaichuan, a grain broker from Guandong Village, Yanqiao Township, Dingyuan County, Anhui Province, entered the gate of Dingyuan County Yunlong Flour Co., Ltd., he hurriedly called out to the workers.
"This is the third truckload of wheat I've sold, and I still have one more truckload of wheat at home waiting to be loaded!" Geng Zaichuan told reporters that he has always cooperated with Yunlong Flour Company, and today he planned to haul 4 truckloads, roughly seventy or eighty tons of wheat to sell. The weather has been unstable, with frequent rain, which affects the speed of wheat sales.
At the plant of Dingyuan County Lvkang Grain and Oil Processing and Trading Co., Ltd., a tall container turning machine was seen, operated by workers, extending its arm to grab a container off a truck, then flipping the huge container over and placing it with its opening facing upward, while a conveyor belt continuously poured wheat into the container's belly. Soon, the container was "full" of wheat, and after workers sealed the opening, it was flipped back over by the turning machine and placed steadily onto a large truck, then reaching a feed processing plant in Fujian by waterway...
"With this equipment, each container can hold 4 more tons of wheat, and because it goes by waterway, the freight is cheap, so we can give more benefits back to ordinary people." Wei Shangzhi, chairman of Dingyuan County Lvkang Grain and Oil Processing and Trading Co., Ltd., told reporters, "My own family is from the countryside, and I know ordinary people's hardships. So, whenever I can buy, I try to buy as much as possible."
Expanding warehouse capacity and carrying out technological upgrading, enterprises are busy with upgrading
"I originally thought there would be a lot of wheat this year, so I specially built a standardized warehouse, expanding capacity by nearly 20,000 tons, in preparation for this year's wheat purchase." At the plant of Dingyuan County Lvkang Grain and Oil Processing and Trading Co., Ltd., Wei Shangzhi pointed to the tall warehouse and said, "I also built a new simple warehouse that can hold 5,000 tons."
As early as before the end of May, Dingyuan County's summer grain production was promising, and the overall situation was relatively good, so the whole county tried every means to increase warehouse capacity. "The county's estimated wheat output is 470,000 tons. We have adopted methods such as vacating warehouses and merging storage, and building simple warehouses, to increase usable warehouse capacity for purchasing and expand storage capacity, striving to prevent the phenomenon of farmers finding it 'hard to sell grain' and ensuring that farmers increase both production and income." Chen Deyi, deputy director of the Dingyuan County Grain Bureau, said in an introduction.
As an enterprise producing flour, Dingyuan County Lvkang Grain and Oil Processing and Trading Co., Ltd. increased warehouse capacity by more than 20,000 tons. Dingyuan County Yunlong Flour Co., Ltd., also mainly producing flour, likewise actively vacated warehouses and merged storage, expanding capacity by 20,000 tons. "Our enterprise consumes 200 tons of wheat every day. Without sufficient wheat reserves, production would be greatly affected." Sun Chengyou, chairman of Dingyuan County Yunlong Flour Co., Ltd., told reporters.
In order to better process wheat and boost the enterprise's development, Wei Shangzhi invested more than 3.7 million yuan in technological upgrading funds this year to carry out technical upgrading of the enterprise's flour production line. "After the process upgrade, the enterprise's ability to grade and handle wheat has improved, the products are more refined, and food safety is better guaranteed." Wei Shangzhi said that the new production line's capacity to handle wheat has increased substantially. Previously it could only handle wheat with about 10% imperfect grains, but now wheat with imperfect grains within 20% can all be handled.
Solving farmers' difficulty in selling grain, enterprises open their doors to buy grain
"After the technological upgrading, our daily wheat processing capacity is around 300 tons, but the wheat currently purchased and stored is only about 3,000 tons." Wei Shangzhi told reporters helplessly that this year, in order to prepare for wheat purchasing, he specially borrowed 8 million yuan from the bank. "For wheat from before the second rain, the price I give is basically 1.05 yuan per jin. Moreover, for all the wheat delivered here, I pay cash and do not issue a single white note."
"This year I delivered more than 1,000 tons of wheat to Boss Wei, all wheat from around the first rain; for wheat after the second rain, I sold all of what I bought to feed mills to make feed." Zhang Xinquan, a grain broker from Dingcheng Town, Dingyuan County, spoke frankly.
From May 26 to June 8, the originally excellent situation for wheat production and purchasing took a sharp turn for the worse because of sudden changes in the weather. Continuous overcast and rainy weather affected the normal harvest of summer grain, and after the rain the wheat showed "three declines" in output, quality, and grade, as well as "two highs" in moisture content and the proportion of moldy and sprouted grains.
"We also can't buy good wheat!" Sun Chengyou also poured out his grievances when he saw reporters. In order to buy wheat, he even lowered the test weight requirement by one grade. Previously the test weight had to reach grade three, 750 grams per liter or above, but now wheat with a test weight reaching grade four, 740 grams per liter, is bought, and the price is still given according to the grade three standard. "There's no way around it. For this alone, I lose 32 yuan per ton of wheat."
Facing the current situation, Dingyuan County has also actively taken measures to encourage enterprises to buy more grain and ease farmers' difficulty in selling grain. "At a time like this, our enterprise must also shoulder its corresponding social responsibility!" Sun Chengyou said. They buy without limit from farmers who come to sell grain, do not restrict purchases, and do not refuse purchases. Farmers from surrounding townships and from Yanqiao Township and Zhangqiao Town to the south all came to sell wheat. "Good wheat is processed into flour, and poor wheat is processed into industrial flour. We buy as much as we can to reduce their losses as much as possible!"
Wei Shangzhi's flour production line is still in the process of being installed. He, in turn, used his personal connections to actively contact feed mills along the coast and sought sales channels through many channels. He admitted frankly that substandard wheat is bought and moved out immediately, earning only money for labor and freight, and he also wants to do what he can to help farmers reduce losses.
Government builds the platform to ease enterprises' cash shortage
"This year enterprises are 'not full.' What can be done if the local area does not have enough wheat to maintain normal production?" Facing the reporter's question, Wei Shangzhi said helplessly, "Then we can only go to the trading market to participate in bidding!"
Dingyuan County is a traditional major agricultural county, and this year the wheat planting area is 1.3 million mu. Wei Shangzhi's enterprise is in Wuxu Town, and the town's wheat output accounts for one-seventh of the county's total output.
"Now farmers' agricultural production, from planting to harvesting, is fully mechanized. However, much of the harvested wheat must be dried in the sun before it can be sold. But now it is very difficult to find a suitable drying yard, and the labor force left at home to farm is mainly the elderly, women, and children. Making them take on the heavy physical work of drying grain is absolutely a test." Wei Shangzhi said that this year there was a sudden heavy rainstorm, and the grain that ordinary people had spread out to dry by the roadside could not be bagged in time, and some of it drifted away with the rainwater. It really made one's heart ache to see it! After returning, I made up my mind to install a set of drying equipment, so that when ordinary people's grain is delivered to me, after drying it can be directly stored in the warehouse, and from then on drying grain will no longer depend on the heavens' mood.
"At present, Dingyuan County is soliciting opinions and encouraging large households to invest in building drying equipment, to shorten the time from the field to storage, reduce grain loss, and safeguard the interests of grain-growing farmers." Chen Deyi, deputy director of the Dingyuan County Grain Bureau, said in an introduction. "We are also actively seeking policies to increase subsidies for grain drying equipment."
As is well known, purchasing grain requires a large amount of funds, and grain enterprises urgently need credit support in summer grain purchasing. "If our warehouse were filled, we would need more than 30 million yuan in financial support." Sun Chengyou admitted frankly that if an enterprise uses its circulating funds to reserve wheat, it is a great challenge for the enterprise.
However, good news also came from the Dingyuan County Grain Bureau: the county will implement a matching purchase policy, under which the government issues a letter, a third party provides guarantees, and according to the purchase contract between the two demand sides, enterprises can obtain loans from banks. By then, Sun Chengyou's enterprise will be able to obtain more than 30 million yuan in credit support.
"Dingyuan County should encourage the planting of red wheat. Red wheat matures earlier and has obvious advantages over white wheat in resisting rain and preventing moldy sprouts." As a relatively influential grain broker in Dingyuan County, Zhang Xinquan spoke his mind. It is understood that the Dingyuan County Agricultural Committee has also been continuously exploring wheat varieties suitable for local planting and promoting them to farmers, contributing to increasing their incomes and helping them become better off.