United Oilseeds profit rises, despite falling crop size

United Oilseeds Producers (UOP) has reported small increases in both profitability and turnover in its latest full year of trading, half a century since the business was first established in 1965.

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The Devizes, Wiltshire-based co-operative   made an operating profit of £1.485 million on revenues of £165.41m in the year ending June 30th 2015, compared to £1.468m and £163.14m in the previous financial year. The company’s net worth increased from £7.98m to £8.33m over the same period. It has announced a profit redistribution of £420,000 to its trading members for the 2014/15 year, the fourth successive record redistribution figure.

“Despite the challenging trading conditions our sector has experienced over the last twelve months, we are delighted to be able to make a fourth consecutive record redistribution of profits to our members - the tenth redistribution of profits we have made in consecutive years,” says UO managing director Chris Baldwin.

“As a co-operative owned entirely by its members, United Oilseeds’ primary aim is to help improve the profitability of members’ individual businesses. With farm incomes down and the market still relatively depressed, this repayment shows how our co-operative supports its members by delivering outstanding value, even in unfavourable economic conditions.”

A survey of the co-operative’s 4,500 members reveals an average oilseed rape  yield of 3.85 tonnes per hectare from harvest 2015, which equates to overall production of 2.42 million tonnes at national level. However, the business estimates that the oilseeds area planted for harvest 2016 is down by 14.9% to 536,000ha, compared to the 630,000ha drilled for harvest 2015 crop. Using average yield figures, this extrapolates to a 2016 UK crop output of as little as two million tonnes, a potential 17.4% reduction year-on-year.

An analysis of the certified seed sales for autumn 2015 shows a 9.7% decrease to 476,000ha packs, compared to the previous years’ 527,000ha. However, conventional types have increased their share against the hybrids. Conventionals were up 3.3% to 182,100ha for 2015 (176,200ha in 2014) while hybrids, at 221,400ha for 2015, are 26% down on 2014’s 299,900ha. High Oleic Low Linolenic (HOLL) varieties have increased to 43,000ha from 13,000ha in 2015, but High Erucic types fell back to 29,600ha from 38,000ha in 2015.

The company has grown its share of the oilseed seed market, with the (HOLL) oilseed rape varieties a particular success. “We have seen the market for HOLL expand, both in the UK and Europe,” notes Mr Baldwin. “Around 40,000 hectares has been planted in the UK this year, and we have achieved a 28% share of this market from a standing start,” he says.

Looking ahead, Mr Baldwin expects trading conditions for farmers to continue to challenge during 2016, with the oilseed rape market likely to remain tough. Consequently HOLL rape, which offers growers a guaranteed minimum premium, represents a significant opportunity, he states.

 “In what is our fiftieth year, United Oilseeds remains firmly committed to the co-operative ethos and delivering independent choice and value to our members, concludes Mr Baldwin. “Increasing our net worth helps to ensure we can maintain our independence, while making the largest profits redistribution in our history shows how growers can benefit from membership.” 

Posted on December 3, 2015 and filed under Company News, Seeds, Top Story.