Farmers co-operative United Oilseeds Producers increases net worth by 16%

Farmers’ co-operative United Oilseeds Producers, which has a 30% share of the UK oilseed rape seed market and sells 20% of the UK’s oilseed rape crop, has reported a 16.2 % increase in net worth for the year ending 30 June, 2014.

The Group’s net worth increased from £6,764,000 in 2013, to £7,861,000. The figure reflects the growing underlying value of the organisation, its businesses and services.

In addition, the co-operative, which has 4,500 members throughout the country and is the UK’s only specialist oilseed rape marketing company, said it paid a record £403,000 profit redistribution to its trading members covering the period to year end 2013. This year’s profit distribution is to be determined by the Board.

Whilst the group’s average turnover over the last six years has increased by 12% per annum, year-on-year turnover for the 12 months ending 30 June 2014 was down from £241m in 2013, to £163m. Year-on-year Group profits before tax were down 18%, from £1,805,000 to £1,468,600. Nonetheless, return on sales for year ending 2014 increased to 0.90% against 0.74% in 2013.

Speaking at a press conference in Newbury Berkshire, United Oilseeds Managing Director, Chris Baldwin, said: “Against a background of difficult trading conditions and a reduction in the UK’s overall OSR crop size, United Oilseeds Producers has still managed to increase its net worth, its return on sales, and pay its trading members the largest redistribution of profits in its 49-year history.

“Year-on-year profits and turnover are lower due to a 410,000 tonne reduction in the size of the UK’s 2013 OSR crop and the drop in the market value of oilseed rape. For example, the average price per tonne paid to United Oilseeds growers in 2013 was £346.45, 15.8% lower than the £411.49 average per tonne price in 2012.

“The market remains highly volatile, though we remain optimistic that trading conditions may improve over the next 12 months,” he continued.

Mr Baldwin went on to highlight the significant role of oilseed rape within agriculture and the benefits United Oilseeds brings to its members. “Oilseed rape remains the key break crop for UK farmers, not just because of the agronomic benefits it offers, but also because of its earnings potential. As a farmers’ co-operative, our core aim is to help our members’ businesses become more profitable and provide them with genuinely independent choice, marketing services and best advice. This performance shows that even in challenging conditions, we offer our members outstanding value.

“Owned and run by farmer members, we remain firmly committed to the co-operative ethos and increasing our net worth helps to ensure we can maintain our independence. We believe this is particularly important at a time when there is some re-structuring of co-ops within the agricultural sector which will serve only to limit genuine independence and farmers’ commercial choice.”

As part of the Group’s growth strategy, which included the purchase of its own Head Office building and Hubbards Seeds last November, United Oilseeds is also investing heavily in a new company-wide IT system that will bring significant operational and communications benefits to its members. The new system is expected to be on-stream in July next year.

UOM Crop Predictions

Mr Baldwin said United Oilseeds’ own survey among its OSR growers shows that the average yield for harvest 2014 was 3.52 tonnes/ha, giving a total production figure of 2.39m tonnes. The area planted for harvest 2015 is estimated to be down 10.55% and using a five year average yield of 3.5 tonne/ha, this suggests a total UK crop production of 2.128m tonnes.

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