Storing farm produce is another way of making money in agribusiness today because increase in commercial Agriculture.
The Food and Agriculture Organisation (FAO), has stated that in some developing countries, Nigeria inclusive, an estimated of over 25 percent of all food produced is never consumed by humans ,but instead gets spoilt or is eaten by insects, rats and other pests.
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 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. 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 till a period of four to six maximum and then later resold when the price appreciates.
This is one the agribusiness that can yield over 100% profit if properly done in this season.
Some farm products that can be used for this type of business include but not limited to; Ogbono, Melon seed ,Potatoes, Palm Oil, Yam, Beans, Rice, Corn, Millet.
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 them when the demand for them 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 periods. But when almost 40% of the commodities have been consumed by the society, the rate of demand will rapidly increase as supply will become limited.
This simply means that if you can store those products for 2-4 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 and melon seed as an example.
Ogbono is a highly nutritious food which is consumed in almost all West African countries.
Ogbono 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) and 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 buy it from Cameroon around March and store up to July, he will make up to 100% profit and even more.
For Melon Seed
Melon seed is mainly sourced from northern part of Nigeria. Its harvest period is 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.
If you must invest in the business strategy and you want to go into a particular farm product, there are things you should know about that particular product. The things to know are; 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.
Requirement For Farm Produce Storage Business
• ware house/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.
Finally, you can make farm produce storage your business and make it big.
By recycling your cash from one produce to another. For instance, you can store palm oil in April -May sell around November-December and reinvest into grains such as soya beans which will be sold by March -April with profit.