Fram Farmers delivers solid annual results

Focusing on innovation and providing excellent service for its 1250 farmer members enabled Fram Farmers to deliver a strong performance during the financial year to 30 June 2014. Annual turnover was £184,536,378 and the Group’s achieved an operating surplus of £13,722, taking its financial reserves to a record £2,672,833.

The UK’s foremost farmers cooperative, Fram Farmers purchases farm inputs and markets combinable crops on behalf of more than 1250 shareholder-members who collectively farm in excess of 350,000 hectares across 39 counties, enabling them to obtain best value from the supply chain and achieve cost savings of up to 40%.

Reporting to members at the Annual General Meeting in East Anglia, Chairman Serena Greenwell said that the past year had seen a number of positive changes at Fram Farmers, which remains focused on its farmer members and determined to provide them with excellent service and information. Mrs. Greenwell stated:

“In September 2013 the Group moved offices from New Road, Framlingham, where we had been based since 1977, to Station Road, Framlingham. The new offices provide a much improved working environment with more space and much better facilities. We also rebranded from AtlasFram to Fram Farmers, reflecting the name that the majority of our members and suppliers were using. Very importantly it also brought the name Farmers back into the name.

“The Group has performed well this year with the commitment from members purchasing farm inputs increasing. Purchasing turnover has increased by 3% despite falls in the price of key inputs such as fertiliser and fuel. More members have participated in the fertiliser pools with the commitment to the Granular Urea pool being up 37.5%. Overall fertiliser tonnage is up 8.5% on the previous year. Fuel has seen more members involved with forward purchasing deals and the expanded fuel cards offers have been welcomed. Volumes of animal feeds increased by 6%, to over 105,000 tonnes, another strong performance.

“The marketing department in partnership with ADM has continued to produce excellent results. Their knowledge of global markets, world stocks, tonnages traded and market requirements have proved to be an exceptional benefit to the management of the pools. This has resulted in a continuing increase in the tonnes committed by more members to the pools.

“Framtrade our wholly owned retail subsidiary that trades substantially with non-members had a good year, contributing £185,000 to the Group. Our balance sheet is strong which enables us to secure support from our suppliers and deliver significant value to our members.

“I would like to thank the members for their increasing commitment and trust in their group, Richard Anscombe, our Chief Executive and the team at Fram Farmers for such a strong performance, Gary Pleasance and the Framtrade team, together with the Board for the time and commitment that they have put into the development of Fram Farmers.”

In his statement to members Richard Anscombe, Chief Executive of Fram Farmers, said:

“Fram Farmers is the foremost farmer-owned national purchasing and grain marketing members’ cooperative delivering the best service and information supported by the best pricing and advice. Our success is due to an unconditional focus on the requirements of our members, who collectively own the cooperative. They are reassured by the fact that we operate in a completely transparent manner, return all financial benefits to them and operate back-to-back input purchasing, which means that their cooperative is never exposed to any financial risk.

“Farmers increasingly appreciate our unique area-based funding method, which provides a known cost of membership and rewards commitment. As a result our membership base has increased further. During the year we were joined by 28 more farm businesses representing an additional 6146 hectares, while existing members also expanded their activities, representing a further 5200 hectares.”

During the year Fram Farmers Crop Inputs Department witnessed another strong performance, with turnover increasing by 5.5% across all arable products and new, innovative tools being introduced to assist members with cash flow and management. Agrochemical turnover rose by 10.3% to £31,398,800, while the fertiliser tonnage was 25% higher and turnover in this area rose to £29,205,773. The number of Fram Farmers members participating in fertiliser pools also increased, the granular urea pool being particularly successful in achieving an attractive price for members.

The Marketing Department continues to thrive and produces excellent results by providing a very personal service focused on the requirements of individual members. They benefit from the extensive knowledge of global markets provided by Fram Farmers strategic partner ADM Direct, which has been exceptionally helpful in managing the cooperative’s crop marketing pools and encouraged an increase in the use of its services.

During the year the committed crop marketing volume totalled 153,462 tonnes, a solid achievement in a challenging year when average crop yields on UK farms were significantly lower due to poor growing conditions at the start of the season. Commitment to the pools also increased to 72,845 tonnes and will rise by a further 74% in 2014/2015, while the Croptrade tonnage for the season closed at 80,617 tonnes. The number of farms which utilize the Fram Farmers LEAF corporate scheme also increased, highlighting the growing importance of LEAF status and the additional £15/t premium available to those who grow oilseed rape on this contract.”

Fram Farmers electricity sales rose by 14.4% and the number of sites for which it provides electricity increased by 293 to more than 3500 as a result of members being able to lock into attractive prices and gain access to large amounts of market information.

Turnover of the Livestock Department’s continued to rise as new livestock members joined, while Fram Farmers more proactive approach encouraged increased commitment from existing members. The volume of feed purchased experienced solid growth, rising 6% to a record 105,000 tonnes, while the value of animal health products also showed strong growth, rising by 16%.

Sales of building materials increased by 19.9%, to £5.24 million and the volume of fuel orders reached 42.4 million litres. The popularity of Fram Farmers forward purchasing fuel scheme, which enables members to benefit from a fixed price for fuel delivered over the harvest period, saw 115 members commit to 3,418,900 litres, which was secured at 64.5p per litre, 4.5ppl below the spot price.

Machinery turnover saw a 8.4% rise to £12 million as more members took advantage of Fram Farmers partnerships with a wide range of manufacturers and suppliers to secure discounts and other advantages. The Group’s agreement with leading farm equipment manufacturer Case IH, the largest fleet deal of its type in Europe, continued to go from strength to strength, providing members with highly attractive financial savings on the complete Case IH range, over and above the discounts which they negotiate with their preferred dealer. Fram Farmers also established rebate terms with a number of additional farm equipment and vehicle suppliers.

Richard Anscombe, Chief Executive Officer, added: “The new services which we introduced during the year will further help members to combat the challenges from increasing price volatility for farm inputs and falling prices for crops. These include our pioneering forward purchasing scheme for fuel, initiatives which enable members who have committed grain to Fram Farmers to delay payment for ag-chem purchases and novel fertiliser pools which enable them to purchase at very competitive prices with guaranteed delivery.

“During the year we also made substantial investments in online information and ordering systems, making it easier for members to benefit from our services. The number of orders placed online has increased substantially, with 40% of those now being placed outside office hours. Working with our Next Generation Council and younger members we recently launched a Smartphone App which enables key inputs to be ordered via a Smartphone, even where there is no or limited Wi-Fi or 3G coverage.”

In addition to financial savings on a wide range of farm inputs Fram Farmers members also benefit from access to a team of product specialists. Working solely in the best interests of members, they provide expert, completely independent advice on a wide range of farming-related issues, recommend when to place orders to achieve the best prices and ensure that products are delivered on time, to the right location. Members receive just one monthly invoice which shows all purchases, further reducing the time and cost of administration.

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