Agricultural purchasing co-operative Anglia Farmers (AF) has reported a 10% higher surplus on lower revenues from its latest full year’s trading. It says turnover is down in line with falling global commodity prices, but membership and product volumes handled continued to grow in the challenging economic environment.
The farmer-controlled group made an operating surplus of £882,000 on sales of £230.9 million in the year ended January 31st 2016, compared to £802,100 and £247.45m in the previous financial year.
After payments to members, a net surplus of £323,000 has been retained to lift shareholder’s funds to £2.81m at the year end, up from the £2.48m twelve months earlier. Shareholding membership rose by 60 over the year to stand at 3,091 on January 31st.
Revenues include trading from AF’s three wholly-owned subsidiaries - AF Affinity, AF Biomass and AF Finance. AF Affinity, set up five years ago to offer group purchasing to non-agricultural businesses and to livestock farmers through FarmBuyer, saw an operating surplus of £47,700 on sales of £6.61m. This is despite fuel price deflation. The year saw growth in the number of village fuel syndicates it supports, plus the development of branded packages with organisations such as FARMA and the Marine Trades Association.
AF Biomass, which helps arable members professionally market their straw into biomass power stations and livestock farm markets, is set to handle 100,000 tonnes of straw this harvest. The business contributed a £94,000 surplus and revenues of £3.45m to the Group.
AF Finance acts as agent in a peer-to-peer lending model. It supported a large number of members with short term crop credit funds of approximately £5.5m during the year.
“The fluctuation in commodity prices of energy (electricity and fuel), fertilisers, cereal seed and animal feeds make year-on-year turnover comparisons difficult,” notes AF Group chief executive Clarke Willis. “But there has been a continued growth in volumes during the year as prices of key commodities fell.
“Risk management of input costs in agricultural businesses is now a key management focus. Our ability to fix fuel prices up to 24 months ahead and cover a large electricity portfolio has mitigated some of the risk, and in 2016 we are increasing the options for fertiliser pools to help cover this variable. Those livestock farmers in our livestock feed pools have seen the benefit of such moves.
“There is no doubt that the professional agricultural business sees the value in central purchasing to save both time and money. We have continued to position ourselves as the largest agricultural purchasing co-operative in the UK and membership continues to grow by reputation and word of mouth.”
The Group claims that its membership grows 56.1% of the UK’s sugar beet, 40% of potatoes and 14% of wheat, and includes 20.5% of its dairy farmers.