United Oilseeds (UO) saw a fall in profitability and turnover from its latest full year of trading, in line with the drop in both the planted area for the 2016 harvest and the low UK oilseed rape yields from that year.
The farmer-controlled business has reported a pre-tax profit of £1.21 million on sales of £173m in the year ended June 30th 2017, compared to £1.53m and £176.2m from the previous year. Net worth at the end of the period was £10.6m, a 9.3% rise on the £9.7m a year earlier.
The co-operative is returning £340,000 to its 4,500 members, the 12th consecutive redistribution payment, but down on the record £425,000 rebate from the 2015/16 year. During the period, the business made a significant long term investment in a new comprehensive IT system designed to improve its operational and communications service to members and customers for the foreseeable future.
“Despite very challenging trading conditions in 2016, these are an excellent and robust set of financial results for United Oilseeds and its members,” says UO managing director Chris Baldwin. “The low average yields of 2.9 tonnes per hectare from harvest 2016 negatively impacted the volume of OSR handled by the company by an estimated 90,000 tonnes.” The company also traded 64,000 tonnes of other commodities including, beans, linseed, oats and peas.
“In addition, a depressed OSR market at the time and the suspension of neonicotinoid seed treatments against flea beetle combined to discourage some farmers from planting OSR. The harvest 2016 crop area of 563,000 hectares was the lowest for five years, down from the peak 758,000 hectares in 2012.
“Despite this trading background, United Oilseeds managed to record a rise in its net worth and secure profits before tax totalling over £1.2m for the year. The £340,000 profit share redistribution means that over the last 12 years, we will have paid back over £4.19m to our membership.”
“Looking forward, we estimate the UK planted area of oilseed rape for harvest 2018 to be 603,000 hectares (up 7.1% from harvest 2017) which is likely to result in an expected production volume of 2.1 million tonnes, assuming an average yield of 3.50 tonnes per hectare.
“United Oilseeds has the largest tonnage of oilseed rape under pool management in the UK and, once again, its pool marketing proved to be an area of outstanding success,” says Mer Baldwin. “Our Carte Blanche Pool reached a base price of £340.01 per tonne before quality bonuses, beating our main competitor’s pool by over £20 per tonne. If you include average quality bonuses, members of the United Oilseeds Carte Blanche Pool for harvest 2016 received £367.32 per tonne for their oilseed rape.”