Focusing oninnovation and providing excellent service for its 1250 farmer members enabledFram Farmers to deliver a strong performance during the financial year to 30June 2014, says the co-operative. Annual turnover was 184,536,378 and theGroup achieved an operating surplus of 13,722, taking its financial reservesto a record 2,672,833.
Fram Farmerspurchases farm inputs and markets combinable crops on behalf of more than 1250shareholder-members who collectively farm in excess of 350,000 hectares across39 counties, enabling them to obtain best value from the supply chain andachieve cost savings of up to 40%.
Reporting tomembers at the Annual General Meeting in East Anglia, Chairman Serena Greenwellsaid 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 withexcellent service and information. Mrs. Greenwell stated:
In September 2013the Group moved offices from New Road, Framlingham, where we had been basedsince 1977, to Station Road, Framlingham. The new offices provide a muchimproved working environment with more space and much better facilities. Wealso rebranded from AtlasFram to Fram Farmers, reflecting the name that themajority of our members and suppliers were using. Very importantly it alsobrought the name Farmers back into the name.
The Group hasperformed well this year with the commitment from members purchasing farminputs increasing. Purchasing turnover has increased by 3% despite falls in theprice of key inputs such as fertiliser and fuel. More members have participatedin the fertiliser pools with the commitment to the Granular Urea pool being up37.5%. Overall fertiliser tonnage is up 8.5% on the previous year. Fuel hasseen more members involved with forward purchasing deals and the expanded fuelcards offers have been welcomed. Volumes of animal feeds increased by 6%, toover 105,000 tonnes, another strong performance.
The marketingdepartment in partnership with ADM has continued to produce excellent results.Their knowledge of global markets, world stocks, tonnages traded and marketrequirements have proved to be an exceptional benefit to the management of thepools. This has resulted in a continuing increase in the tonnes committed bymore members to the pools.
Framtrade ourwholly owned retail subsidiary that trades substantially with non-members had agood year, contributing 185,000 to the Group. Our balance sheet is strongwhich enables us to secure support from our suppliers and deliver significantvalue to our members.
I would like tothank the members for their increasing commitment and trust in their group,Richard Anscombe, our Chief Executive and the team at Fram Farmers for such astrong performance, Gary Pleasance and the Framtrade team, together with theBoard for the time and commitment that they have put into the development ofFram Farmers.
In his statementto members Richard Anscombe, Chief Executive of Fram Farmers, said:
Fram Farmers isthe foremost farmer-owned national purchasing and grain marketing memberscooperative delivering the best service and information supported by the bestpricing and advice. Our success is due to an unconditional focus on therequirements of our members, who collectively own the cooperative. They arereassured by the fact that we operate in a completely transparent manner,return all financial benefits to them and operate back-to-back inputpurchasing, which means that their cooperative is never exposed to anyfinancial risk.
Farmersincreasingly appreciate our unique area-based funding method, which provides aknown cost of membership and rewards commitment. As a result our membershipbase has increased further. During the year we were joined by 28 more farmbusinesses representing an additional 6146 hectares, while existing membersalso expanded their activities, representing a further 5200 hectares.
During the yearFram Farmers Crop Inputs Department witnessed another strong performance, withturnover increasing by 5.5% across all arable products and new, innovative toolsbeing introduced to assist members with cash flow and management. Agrochemical turnover rose by 10.3% to 31,398,800, while the fertilisertonnage was 25% higher and turnover in this area rose to 29,205,773. Thenumber of Fram Farmers members participating in fertiliser pools alsoincreased, the granular urea pool being particularly successful in achieving anattractive price for members.
The MarketingDepartment continues to thrive and produces excellent results by providing avery personal service focused on the requirements of individual members. Theybenefit from the extensive knowledge of global markets provided by Fram Farmersstrategic partner ADM Direct, which has been exceptionally helpful in managingthe cooperatives crop marketing pools and encouraged an increase in the use ofits services.
During the yearthe committed crop marketing volume totalled 153,462 tonnes, a solidachievement in a challenging year when average crop yields on UK farms weresignificantly 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 afurther 74% in 2014/2015, while the Croptrade tonnage for the season closed at80,617 tonnes. The number of farms which utilize the Fram Farmers LEAFcorporate scheme also increased, highlighting the growing importance of LEAFstatus and the additional 15/t premium available to those who grow oilseedrape on this contract.
Fram Farmerselectricity sales rose by 14.4% and the number of sites for which it provideselectricity increased by 293 to more than 3500 as a result of members beingable to lock into attractive prices and gain access to large amounts of marketinformation.
Turnover of theLivestock Departments continued to rise as new livestock members joined, whileFram Farmers more proactive approach encouraged increased commitment fromexisting members. The volume of feed purchased experienced solid growth, rising6% to a record 105,000 tonnes, while the value of animal health products alsoshowed strong growth, rising by 16%.
Sales of buildingmaterials increased by 19.9%, to 5.24 million and the volume of fuel ordersreached 42.4 million litres. The popularity of Fram Farmers forward purchasingfuel scheme, which enables members to benefit from a fixed price for fueldelivered 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 turnoversaw a 8.4% rise to 12 million as more members took advantage of Fram Farmerspartnerships with a wide range of manufacturers and suppliers to securediscounts and other advantages. The Groups agreement with leading farmequipment manufacturer Case IH, the largest fleet deal of its type in Europe, continuedto go from strength to strength, providing members with highly attractivefinancial savings on the complete Case IH range, over and above the discountswhich they negotiate with their preferred dealer. Fram Farmers also establishedrebate terms with a number of additional farm equipment and vehicle suppliers.
Richard Anscombe,Chief Executive Officer, added: The new services which we introducedduring the year will further help members to combat the challenges fromincreasing price volatility for farm inputs and falling prices for crops. Theseinclude our pioneering forward purchasing scheme for fuel, initiatives whichenable members who have committed grain to Fram Farmers to delay payment forag-chem purchases and novel fertiliser pools which enable them to purchase atvery competitive prices with guaranteed delivery.
During the yearwe also made substantial investments in online information and orderingsystems, making it easier for members to benefit from our services. The numberof orders placed online has increased substantially, with 40% of those nowbeing placed outside office hours. Working with our Next Generation Council andyounger members we recently launched a Smartphone App which enables key inputsto be ordered via a Smartphone, even where there is no or limited Wi-Fi or 3Gcoverage.
In addition tofinancial savings on a wide range of farm inputs Fram Farmers members alsobenefit from access to a team of product specialists. Working solely in thebest interests of members, they provide expert, completely independent adviceon a wide range of farming-related issues, recommend when to place orders toachieve the best prices and ensure that products are delivered on time, to theright location. Members receive just one monthly invoice which shows allpurchases, further reducing the time and cost of administration.