Benchmarking survey highlights major input cost savings for farmer-owned cooperative’s members

Farming businesses which are members of Fram Farmers, the UK’s leading inputs purchasing and crop marketing cooperative, achieve an average financial saving of almost 10 per cent on key inputs sourced through the group compared with the wider market, a survey by its Next Generation Team has highlighted.

A not-for-profit farmer-owned cooperative which enables members to obtain best value from the supply chain, Fram Farmers provides the purchasing, grain marketing and administrative function for more than 1400 farming businesses throughout the UK.

Next Generation Team members Tim Gilbert, Thomas Coulter, Tom Mountain and Sophie Clarke, compared prices for 15 key inputs, including fuel, electricity, insurance, crop protection products and fertilisers, on a month-by-month basis going back as far as 2011.

The price advantages highlighted by their research included a 22% saving on UK Ammonium Nitrate fertiliser ordered through the Fram Farmers purchasing pool, 18% for insurance, 11% on granular urea (pool), 11% for electricity, 11% on heating oil and 8% for gasoil.

Overall, memberssaved an average of 9.67% across 15 key inputs and an additional 2.76% on crop protection products where Fram Farmers purchased these products on their behalf, rather than doing so themselves through a chosen supplier using their Fram Farmers account.

The survey was initiated by Richard Anscombe, Fram Farmers’ Chief Executive, who states: “One never knows what the outcome of such an exercise might be, and if it highlights shortcomings there’s even more reason to do it. However, this demonstrated clearly the value of Fram Farmers membership.

“Aggregating purchasing volumes allows us to negotiate strongly with suppliers, who value dealing with us because we guarantee them payment, are professional and efficient to deal with. Our 50 expert staff have access to ‘live’ information for their sector, constantly monitor the markets and place orders at the most favourable time for our members. For smaller purchases this will be done automatically, but for larger orders, such as fertiliser, we advise members when market conditions are favourable and suggest they commit at that time.

“Clearly, farming businesses which are not Fram Farmers members, or those which order only some key inputs through us, are missing out on considerable savings. If they look back over five years at how much they have spent and calculate what 9.67% of that represents in monetary terms, they will be surprised.

“These very significant financial savings take no account of the additional savings in time and administration, together with the added convenience, which members enjoy by dealing through their cooperative.

“Even the largest farming enterprises cannot replicate the expertise, resources and range of services which Fram Farmers provides, including access to industry experts who give totally independent input purchasing and combinable crop marketing advice. Consequently, professional farming businesses increasingly recognise that membership is the most cost-effective, efficient way to deal with suppliers and those who make full use of their cooperative find it very liberating.

“Brexit could reduce competition within the agricultural supply sector and ultimately lead to UK farming businesses paying more for essential inputs. One way that they can help to counteract that is by entrusting all of their input purchases to Fram Farmers.”

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About The Author

John Swire - Editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.