Farmer-owned break crop specialist United Oilseeds has reported a sharp rise in profitability, and forecasts increased rapeseed plantings for the 2022 and 2023 harvest years.
The business made a pre-tax profit of £1.51 million on a turnover of £171.97m in the year to June 30th 2021, compared to £1.12m and £142.52m in the previous year – respective increases of 34% and 21%. Net worth rose 11% to £13.53m.
The co-operative is making a profits redistribution payment to its trading members of £440,000 – a record figure for the company and 38% higher than last year’s figure.
“Over a 12-month trading period – which featured the smallest rapeseed area ever planted in the UK, significant economic effects from the covid pandemic and the UK’s exit from the European Union – United Oilseeds has delivered an outstanding performance with the help and support of its farmer members and staff,” notes managing director Chris Baldwin. “We are pleased to be able to announce the record profit share to our farmer members at a time when they are facing huge challenges from increased input costs, labour shortages and economic uncertainty.”
Mr Baldwin adds that United Oilseeds share of the UK rapeseed certified seed market and UK rapeseed crop trading have both risen to 30%.
The company estimates the UK’s 2021 oilseed rape crop harvested area at 279,099 hectares, allowing for an estimated 5% crop loss. With an average 2021 yield of 3.20 tonnes per hectare, this points to a production figure of 893,116 tonnes. With the UK requiring 1.9m tonnes of crop each year, this leaves an import requirement of 1.01m tonnes in the 2021/22 marketing year.
Looking ahead, United Oilseeds estimates that 386,102 ha were sown to oilseed rape this autumn. With a 5% loss, this points to a harvested area of 366,797 ha for 2022. Anecdotal reports around the regions indicate well established crops so far, particularly where they were early drilled.
“After many years of decline, the UK’s drilled rapeseed area has now begun to increase and we believe it is a trend that will continue,” notes Mr Baldwin. “Another positive factor is the 41% increase in winter barley planting this autumn – winter barley is a good early entry for oilseed rape and its area has increased by 128,000 ha to 440,000 ha for harvest 2022. Therefore, we predict an oilseed rape area of 450,000 ha for 2023 – a 23% rise on 2022.” says Mr Baldwin. “This would reduce the UK oilseed shortfall to 460,000 tonnes.
Seed plantings in autumn 2021
Turning to the seed market, Mr Baldwin reported that plantings of conventional certified rapeseed varieties by area increased by 16.1% in autumn 2021, while hybrid plantings grew by 53.8%. The specialist HEAR and HOLL rapeseed areas for 2022 grew by 39.8% and 39.0% respectively, and that for Clearfield varieties by 3.3%.
“This increase in the hybrid and conventional OSR markets has meant that United Oilseeds generated a 53% increase in overall bag sales this autumn,” he says. “This is also partly due to the popularity of two key varieties, Acacia and Aurelia. Acacia now accounts for 40% of the UK’s conventional rapeseed market and 11% of the overall UK certified OSR seed market. Aurelia has an 18% share of the UK hybrid market and a 13% share of the total UK certified rapeseed market.”
Mr Baldwin anticipated an increasing list of ever-improving OSR varieties from which to choose, including ones with more stacked traits and the introduction of new “seventh generation” varieties which have many agronomic benefits.
“Oilseed rape market prices are high and are likely to remain so,” he continued. “At one point this year the price even briefly touched €700 per tonne on the Matif futures market (equivalent to £593.22 per tonne). These higher prices have certainly helped encourage farmers to grow OSR again, but it is always important to remember that one of the OSR market’s traditional characteristics is volatility.
“It is clear that oilseed rape has now ‘turned the corner’ and we can expect to see plantings continue to increase over the next few years with new and improved varieties coming on to the market. This is good news for growers and good news for the future of rapeseed cropping,” Mr Baldwin concluded.