Hello nairalanders,

The new planting season is here and am about trying my hands on 2 acre of groundnuts.
Fingers crossed. I'll be uploading the progress regularly to teach and be taught so lets be positive on this thread.

I am into groundnut oil production and my major challenge has been the high cost of raw materials (groundnut) which has rendered the business handicapped.
I do buy groundnuts from bida, mokwa, kano, gombe and adamawa but the cost and logistics has made me to think inward and homeward.
Cost of leasing 1 acre is #6,000
Tractor for ploughing 1 acre is #5,000 excluding fueling.
Seed - i bought improvised seed, samnut 21 and 22 (12 kg per acre each) = #9,600 for all
Other things to do -
Tractor ridging - #5,000 per acre minus fueling.
Herbicides
Planting cost
Insecticide to be sprayed immediately after flowering.
Cost of spraying insecticide.
Cost of harvesting.
Thanks and will keep you updated

Buying and selling of agricultural produce is quite profitable than farming.

Writing as a practising farmer with some years of experience

emmaodet:
Hello nairalanders,

The new planting season is here and am about trying my hands on 2 acre of groundnuts.
Fingers crossed. I'll be uploading the progress regularly to teach and be taught so lets be positive on this thread.

I am into groundnut oil production and my major challenge has been the high cost of raw materials (groundnut) which has rendered the business handicapped.
I do buy groundnuts from bida, mokwa, kano, gombe and adamawa but the cost and logistics has made me to think inward and homeward.
Cost of leasing 1 acre is #6,000
Tractor for ploughing 1 acre is #5,000 excluding fueling.
Seed - i bought improvised seed, samnut 21 and 22 (12 kg per acre each) = #9,600 for all
Other things to do -
Tractor ridging - #5,000 per acre minus fueling.
Herbicides
Planting cost
Insecticide to be sprayed immediately after flowering.
Cost of spraying insecticide.
Cost of harvesting.
Thanks and will keep you updated

jethro2:

Buying and selling of agricultural produce is quite profitable than farming.

Writing as a practising farmer with some years of experience

I understand you bro but am not into the trading aspect.
I am a producer / manufacturer and my major raw material is extremely high.
Moreover, i have other things doing (salary job) and don't have the time, strength and effort to be doing the buying and selling.
My aim is to farm the groundnuts and process into oil and cake while i sell the cake to feedmills, i sell the oil to consumers.
I do buy groundnuts at 165-180k per ton during harvesting season between august and October after which it skyrockets to 250-300k per ton of which i don't have the financial strength to buy a lot and keep for processing all round the year.
Moreover, by the time you factor in transport (10-16k) per ton, loading and offloading charges after which you factor in cost of processing charges like fuel for generator,
Factory boy salary,
Factory rent,
Nepa bill,
Cost of buying packaging materials (25ltrs keg), my brother you are running at loss because the profit margin is very very slim.
Maximum i can make per ton is 220k and factor in all the cost i wrote above.
So planting i believe will give the business that enough breathing space / large profit margin it needs to be able to grow.
Afterall, the farmers are making profit if not the would have quitted.

emmaodet:


I understand you bro but am not into the trading aspect.
I am a producer / manufacturer and my major raw material is extremely high.
Moreover, i have other things doing (salary job) and don't have the time, strength and effort to be doing the buying and selling.
My aim is to farm the groundnuts and process into oil and cake while i sell the cake to feedmills, i sell the oil to consumers.
I do buy groundnuts at 165-180k per ton during harvesting season between august and October after which it skyrockets to 250-300k per ton of which i don't have the financial strength to buy a lot and keep for processing all round the year.
Moreover, by the time you factor in transport (10-16k) per ton, loading and offloading charges after which you factor in cost of processing charges like fuel for generator,
Factory boy salary,
Factory rent,
Nepa bill,
Cost of buying packaging materials (25ltrs keg), my brother you are running at loss because the profit margin is very very slim.
Maximum i can make per ton is 220k and factor in all the cost i wrote above.
So planting i believe will give the business that enough breathing space / large profit margin it needs to be able to grow.
Afterall, the farmers are making profit if not the would have quitted.

No,I humbly disagree.
Manufacturers all around the world buy products from farmers all the time,you know what you lack?
Wanna know?
Ok I'll tell you.
It's simply capacity.
Let's say you have more money and resources,let me start pointing out where you'll get the breathing space you so desire;
1)purchasing power;
Let's say you have enough money to buy 100,000tons at a go,do you think you'll still buy 1ton for 180k?
Hell no,you can have the audacity to tell the farmer that it's either 90k per ton or he go bleeps his mama while you humbly go and import from outside.
2)logistics;
It cost you 10-16k/ton to transport because you buy small small.
If you buy good quantity like I stipulated,you'll get to need bigger vessels or truck for haulage which when you fill to the brim and press calculator,you'll find out that it will cost like 3-5k/ton to transport because you now load more product per unit area.
3)Storage;
If you have money and capacity,you'll be able to build silos to store grains so that at time of scarcity,you'll have grains you had stored that will last you through the scarcity period.
You'll get to make money from hiking selling price due to scarcity even though you bought raw material at normal price,thereby maximising profit.
4)output capacity;
Imagine you have bigger machines that can handle more volume and push out more output per unit time,that is the same time and almost the same resources you use now to produce small small quantity will be used to bring out bigger output,that is you now get more jugs or kegs of oil on almost the same resource used to produce those small small ones you use to produce.
That further drives production cost down and gives you more room for profit or for you to be more competitive.
Imagine that...
Packaging;
Imagine you have capacity to buy 100,000 empty jugs at a go.
Will you still patronise iya big nyarsh that sell close to you with the small son at her shop with catarrh on his nose all the time?
Remember she always have small quantity available sef and by so her price will be very high.
Nah....
You'll now buy from the company direct at a very good price and they'll handle the logistics for you sef to your doorstep.
Also,imagine what will happen to your sales?
It will skyrocket,because you are competitive with good product and can give you the ability to drop price more and still be profitable because your sales is very high,even if you make 200 naira per jug,you multiply by your quantity or output or selling power and you smile.
Ownership of logistics;
Imagine you no longer hire transport but own them?
You know what that means?it now cost you less to haul product from point A to B.
That is still driving production cost down and giving room for profit or competitiveness.
Automation;
Imagine you get enough capital to buy modern automated machines?
It means you'll higher less labour,spend less per unit time or output,that is you get to save money on labour hire while machine handles all what those expendable humans use to do?
You make more money and remain very competitive.
In fact they are so plenty I can't list all.
Note;
There is no such thing as bad business,you just don't have enough money to run it optimally or enough strategy for it to be profitable.
Finish!

Logoobenz:
!

Logobenz,
i get you bro but am drawing a plan out for mini and small scale businesses and not medium and large scale businesses.
To compete with the big guys with the resources at hand is a suicide mission and that is where the SWOT Analysis come in to play.
I know my business Strength, Weakness, Opportunities and Threats.

I laid out a plan on how a starting entrepreneur can start and be able to grow and later compete with the big boys.
For example -
A big boy miller in Kano may likely be processing 2 tons of groundnut on average per day, 20 days a month = 40 tons per month and about 440 ton per year excluding 1 month for festive etc.
That is about 13-14 trailers a year and if he is to buy at 160k per ton as landing cost,
That is 70m for purchasing raw materials a year.
If total revenue is 200k per ton, that is 88m per year with gross profit of 18m.
By the time you remove production cost, the net profit will be lower.
Now let us look at the small scale farmer/processor.
If am to lease 20 heacters of land at 5k per year to farm, it will cost me 2m to farm it and get 20-30 tons of groundnuts which will give me 4-5m profit and mind you, i can farm twice a year which will double the profit and quantity.
Not only that, my machines will be less stressed because i will be processing on average 4 tons per month or 1 ton per week unlike kano processor of 40 tons per month thereby causing more engine depreciation on his side.
One love bro, thanks for sharing your knowledge.

Please Mr Emodet can I contact you please reach me on this number 08118573603

emmaodet bro here's my WhatsApp line



I don't know why my mail ain't opening

Biingoo:
emmaodet bro here's my

Ok bro

Big brother Emma. Kudos.

Omar09:
Big brother Emma. Kudos.

Thanks bro.
One Love

Pls, I also need help on groundnut farming.


I will be glad if you can put me through.

is planting beans in Lagos a good idea. will the beans do well?

Hasib04:
Pls, I also need help on groundnut farming.


I will be glad if you can put me through.

How many acres of land are you doing?
Which seed are you using? Local or improved seed?
Where is your location?

wiseone1111:
is planting beans in Lagos a good idea. will the beans do well?

Lagos
Which area? And how many plots?
About beans, i don't know if our ecological and climatic system encourages it because have not seen any farmer doing it on a medium or large scale in Nigeria

OP I have sent a pm to you. Pls I want to ask some questions. Thank you

mankettle:
OP I have sent a pm to you. Pls I want to ask some questions.
Thank you

Ok bro

Kai

emmaodet:


Lagos
Which area? And how many plots?
About beans, i don't know if our ecological and climatic system encourages it because have not seen any farmer doing it on a medium or large scale in Nigeria

in ikorodu Lagos, I plan cultivating on half a plot. just to keep myself busy during these lockdown.will the beans do well

wiseone1111:
in ikorodu Lagos, I plan cultivating on half a plot. just to keep myself busy during these lockdown.will the beans do well

I don't know but you can give it a trial. More or less like a pilot phase before you expand.

@Emmaodet, I’m following you on this, please keep us posted on your progress. God bless your hussle.

U gat me thinking

OK

DonCarlos1:
@Emmaodet, I’m following you on this, please keep us posted on your progress. God bless your hussle.

Thanks bro, will keep you updated with pictures

Expand your market and connect with more customers with Quick Food Outlet. Create a free Online Store for your farm produce/raw food items, animal feeds, Farm services and other farm related activities Interact with customers close to you and across Nigeria, discuss with them on safe delivery.
Check my signature for more info.

miracle139:
I don't know but you can give it a trial. More or less like a pilot phase before you expand.

Mr Emma please I would love to have a private chat with you

Can I please have your number

Pm me and we can talk

jethro2:

Buying and selling of agricultural produce is quite profitable than farming.

Writing as a practising farmer with some years of experience

Agree. Farmers work extremely hard, but the reward is rarely commensurate. If you do well this and next year, all those gains can be wiped out in year 3. Farmers are the least rewarded in the agricultural chain.

The market is very unfair to farmers. Middlemen & women and retailers make all the money.

DeLaRue:


Agree. Farmers work extremely hard, but the reward is rarely commensurate. If you do well this and next year, all those gains can be wiped out in year 3. Farmers are the least rewarded in the agricultural chain.

The market is very unfair to farmers. Middlemen & women and retailers make all the money.

And that is why am closing down the chain line by being the farmer and processor so as to give a good profit margin and able to withstand loss and low price to some extent.

Pls who have a cucumber seeds for sell I really nid it call 08138140193

jethro2:

Buying and selling of agricultural produce is quite profitable than farming.

Writing as a practising farmer with some years of experience

who will be the fool that will now suffer to farm the ones u are to buy?

No,I humbly disagree.
Manufacturers all around the world buy products from farmers all the time,you know what you lack?
Wanna know?
Ok I'll tell you.
It's simply capacity.
Let's say you have more money and resources,let me start pointing out where you'll get the breathing space you so desire;
1)purchasing power;
Let's say you have enough money to buy 100,000tons at a go,do you think you'll still buy 1ton for 180k?
Hell no,you can have the audacity to tell the farmer that it's either 90k per ton or he go bleeps his mama while you humbly go and import from outside.
2)logistics;
It cost you 10-16k/ton to transport because you buy small small.
If you buy good quantity like I stipulated,you'll get to need bigger vessels or truck for haulage which when you fill to the brim and press calculator,you'll find out that it will cost like 3-5k/ton to transport because you now load more product per unit area.
3)Storage;
If you have money and capacity,you'll be able to build silos to store grains so that at time of scarcity,you'll have grains you had stored that will last you through the scarcity period.
You'll get to make money from hiking selling price due to scarcity even though you bought raw material at normal price,thereby maximising profit.
4)output capacity;
Imagine you have bigger machines that can handle more volume and push out more output per unit time,that is the same time and almost the same resources you use now to produce small small quantity will be used to bring out bigger output,that is you now get more jugs or kegs of oil on almost the same resource used to produce those small small ones you use to produce.
That further drives production cost down and gives you more room for profit or for you to be more competitive.
Imagine that...
Packaging;
Imagine you have capacity to buy 100,000 empty jugs at a go.
Will you still patronise iya big nyarsh that sell close to you with the small son at her shop with catarrh on his nose all the time?
Remember she always have small quantity available sef and by so her price will be very high.
Nah....
You'll now buy from the company direct at a very good price and they'll handle the logistics for you sef to your doorstep.
Also,imagine what will happen to your sales?
It will skyrocket,because you are competitive with good product and can give you the ability to drop price more and still be profitable because your sales is very high,even if you make 200 naira per jug,you multiply by your quantity or output or selling power and you smile.
Ownership of logistics;
Imagine you no longer hire transport but own them?
You know what that means?it now cost you less to haul product from point A to B.
That is still driving production cost down and giving room for profit or competitiveness.
Automation;
Imagine you get enough capital to buy modern automated machines?
It means you'll higher less labour,spend less per unit time or output,that is you get to save money on labour hire while machine handles all what those expendable humans use to do?
You make more money and remain very competitive.
In fact they are so plenty I can't list all.
Note;
There is no such thing as bad business,you just don't have enough money to run it optimally or enough strategy for it to be profitable.
Finish!

oya now that you are done with all the big grammar, what is the solution?

Since he does not have capacity like u said, can u give him the capacity?

He is talking about how to approach his expansion plans from another perspective (vertical integration) and u are here talking big money that he does not have and which u cannot give.

What sense does it make?

DeLaRue:


Agree. Farmers work extremely hard, but the reward is rarely commensurate. If you do well this and next year, all those gains can be wiped out in year 3. Farmers are the least rewarded in the agricultural chain.

The market is very unfair to farmers. Middlemen & women and retailers make all the money.

problem is, without the farmer, the middle men are out of business. Don't discourage farmers.

Smart farmers will gradually learn to bypass the middle men and make more money