Farm produce storage business is now, by Agbaji Chinedu

Today’s Agribusiness

Storing farm produce is another way of making money in agribusiness today because of the increase in demand for food and feed for human and animal consumptions respectively.

The Food and Agriculture Organization (FAO) says that in some developing countries (Nigeria inclusive) an estimated over 25 per cent of all food produced is never consumed by humans but instead gets spoilt or is eaten by insects, rats and other pests.

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Some agricultural products usually appreciate with time because the ratio of supply to demand of such commodities always decreases exponentially with time. this is a wonderful business strategy with a low level of risk. Many business moguls who have discovered this particular process have reaped wonders from it. Many businessmen don’t understand or even invest in this because of processing and storage information which they lack.

Now let us clarify the concept of this business strategy. The agricultural storage business is a process in which farm products are purchased by the businessman directly from the farmers or possibly wholesalers and are stored for a period of four (4) to six (6) maximum and then later resold when the price appreciates.

This is one agribusiness that can yield over 80% profit if properly done in this season. Some farm products that can be used for this type of business include but are not limited to; ogbono, melon seed, potatoes, palm oil, yam, beans, rice, corn, millet, soya beans, etc.

The business strategy

The major strategy in this agribusiness is buying these agricultural products when their supply is approximately equal or even higher than the demand for them and reselling when its demand is highly great when compared to the supply.

Supply is always higher during harvest periods, and it always matches the demand for the commodities during this period. But when almost 40% of the commodities have been consumed by society, the rate of demand will rapidly increase as supply will become limited. This simply means that if you can store those products for 2-6 months from the time of harvest you will be among those that will reap from the real wealth of the commodities. Then imagine when you store it up to the next planting season. That simply means that you have hit a goldmine.

Now let’s use ogbono, melon seed and beans as an example.

Ogbono: is a highly nutritious food that is consumed in almost all West African countries. It is mainly sourced from five west African countries; Nigeria, Cameroon, Ivory Coast, Benin, and Ghana.

It has three major harvest periods in West Africa;

September harvest (usually from Nigeria)

January harvest (usually from Ivory Coast)

March harvest (mainly from Cameroon).

If a businessman from Nigeria can buy this ogbono from farmers around September and store it till December or he buys it from Cameroon around March and store it up to July, he will make up to 100% profit and even more.

For melon seed

Melon seed is mainly sourced from the northern part of Nigeria. Its harvest period is in August.
if a businessman should buy it in this period and store it up to four months and above, he will arguably make more than 100% profit from it.

Beans

Beans are considered one of the ultimate emergency foods because they are very nutritious and non-perishable.  However, beans will go bad if they aren’t stored correctly. The best time to store beans is from November ending to January. From November ending beans are dry enough for storage and it is cheap in the open market. There are technicalities involved in beans storage that will give you a 100% return on investment. For instance, people that stored beans in 2020 made over 100% return on investment.

There are things you should know about this agribusiness before venturing especially on a particular product you want to store. The things to know are;

Planting season
Harvesting period
Best place to source it
Best market to sell your product
Best storage system
Level of competition in the business

Requriment for farm produce storage business

Capital

Warehouse/storage facility

Company registration

Information (planting season, harvest period, best place to source it, the farmers to buy from, best market to sell your product, best storage system, level of competition in the business) etc.

Finally, you can make farm produce storage your business and make it big by recycling your cash from one product to another. For instance, you can store palm oil in April – May and sell around November – December and reinvest into grains such as soya beans which will be sold by March – April with profit.

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