11.03.2011

Dow Jones Agricultural Conference with Michael Gutting

The Dow Jones Agricultural Conference took place on 22.02.2011 in Oberursel. One speaker was Michael Gutting, Managing Partner at Saalemühle Alsleben GmbH, who discussed modern strategies on the corn markets from the perspective of a medium-sized milling company.

In this context, the starting situation is not exactly easy, as there can today no longer be any speak of calm corn markets. There is constant competition with regard to quality, price and availability. Saalemühle therefore pursues a comprehensive assurance concept for its partners upstream and downstream.

The most important finding: quality is produced in the field. Approx. 80 % of the flour quality is determined by the corn. Therefore around 80 % of the costs of our products is for the corn. For us, this means: The quality of each grain of corn counts!

For this reason, Saalemühle works with over 250 selected farmers, who have a combined total area of approx. 320,000 ha. We do not see the farmers as suppliers, but as partners. For each individual wheat plot is important to us. Although Saalemühle is not able to meet all wheat requirements each harvest time exclusively from the region, in this way we know what is available. Furthermore, we help our farmers with our corn drying for quality assurance in problematic years.

For the farmers, this means above all security: In recent years, the risk of price fluctuations has increased. Saalemühle is nevertheless on the market at all times, whether customers want to buy or farmers want to sell. In this regard, we do not see ourselves as speculators, but as processors and service providers. That's what we are and that's what we can do. Therefore every business transaction (in purchasing or selling) is assured. For this, we also use modern instruments such as hedging at commodity futures exchanges.

Michael Gutting describes an example of successful cooperation at the end of his presentation: the Saalemühle durum wheat concept. With support and encouragement from Saalemühle, the cultivation of durum wheat in Saxony-Anhalt was more than tripled between 2008 and 2010. The cultivation area in Saxony-Anhalt is thus over 50 % of the durum wheat cultivation area in Germany! The idea behind this was to ensure 100 % cultivation from the region. And the success proves us right and shows that where there's an idea and good partners, there's a way.