The UK’s largest farmer-owned grain co-op Openfield Group has announced a return to profit, with a £6.6m turnaround in fortunes.
The group reported profits before tax of £2.4m for the year to 30 June 2015, after a loss of £4.2m in 2014. The bad performance had been blamed on a poor harvest in 2012 when the wettest year on record affected both grain quality and yields, as well as a reduction in autumn sowing in 2013.
An improved harvest in 2014 has been recognised as helpful to the turnaround, as well as business decisions such as acquisition of the grain activities belonging to Countrywide Farmers, the reintegration of the transport function previously managed by DHL Supply Chain, and an extensive export programme.
During the year, Openfield stopped acting as the marketing partner for two members of the central store network. However, the extra work acquired from Countryside Farmers was more than enough to make up the for the loss. Openfield chairman and farmer Richard Beldam congratulated the management team for refocusing the business on behalf of its members.
“Shrewd capital management and good consumer relations enabled Openfield to collect funds from customers up to three days earlier than in previous years,” he said. “This enabled the business to pay farmers on average nine days earlier. Farm businesses are under intense financial pressure and we have responded by doing what we can to ensure the timely transfer of funds”
Openfield was formed in 2008 following the merger of Centaur and Grainfarmers. It is owned by 2700 farmers who commit grain to the business and also works with over 4000 others.
Mr Beldam reaffirmed the group’s commitment to the co-op model: “It is disappointing that other farmer-owned businesses chose not to share our vision for returning value to members, however, we are financially better for it and the reaction from consumers has been entirely positive.
“We remain committed to our co-operative principles of building long-term alliances with consumers for the benefit of UK farmers and are willing to welcome those farmers who share this philosophy with us.”