Suffolk-based agricultural purchasing and crop marketing co-operative Fram Farmers has recorded a significant increase in its trading surplus on flat revenues, despite what it terms a challenging year with reductions in the value of key agricultural inputs such as fertiliser and fuel.
The company made an operating surplus of £174,117 on a turnover of £183.3 million in the financial year to June 30th 2015, compared to £13,722 and £184.5m in the previous year. The 2012/13 year saw a surplus of £138,300 and £190m. Fram Farmers' financial reserves now stand at a record £2.85m. The group now represents over 1,300 farmers managing some 400,000 hectares across the UK, with 61 new members joining during the period.
During the twelve months the business recorded a 17% rise in the volume of livestock feed purchased at 124,200 tonnes, through increased commitment from existing members and new accounts. There was also an 8.5% increase in the animal health products handled. On the arable side, volumes of crop protection products purchased through Fram Farmers rose by 5.6%, with greater of the group’s fertiliser pools with the advantage of scheduled delivery and split payments.
The Fram Farmers Marketing Department, which operates in a unique partnership with ADM Direct, saw a 44% increase in the volume of grain handled at over of over 200,000 tonnes, a seasonal record for the company. In addition, there was a 61% rise in member commitment to its grain marketing pools to help manage market volatility.
Apart from the traditional agricultural inputs, the business brokered 9% more electricity sales on behalf of members. Its farm machinery turnover remained static, outperforming some sectors of the UK equipment market, but tractor hire volume through the group increased as farms continue to restructure their fleets and systems to seek financial and operational efficiencies. The wholly-owned Framtrade retail subsidiary which supplies oil and gas products to over 4,000 members of the public, contributed a record surplus of £378,288 to the group.
"Given that the agricultural industry has struggled with returns falling across most sectors, Fram Farmers has performed well,” states chairman Serena Greenwell. "In addition to securing competitive prices, we also rewarded members' loyalty by returning all of the rebates which were negotiated with suppliers to those who earned them, a total of £849,463.”
Chief executive Richard Anscombe adds: "Despite a slight fall in purchasing turnover, which reflected much larger declines in the prices of two key farm inputs, fertiliser and fuel, purchasing volumes held up well. During the year we processed 203,974 invoices, a new record that underlines the huge savings in administration time from which Fram Farmers members benefit."
"To ensure that Fram Farmers continues to move forward we have further enhanced the range and quality of our services for the year ahead. We will be working even more closely with suppliers to drive best value and service, as well as helping members to improve their management of risk in respect to input purchasing and crop marketing.
“As a progressive cooperative we also continue to invest in the Next Generation of farmers with specific events and training based upon what our younger members tell us is important to their farming futures."