United Oilseeds warns of 15% crop area cut for 2024

27th November 2023 | Company News, Crops, Seeds

United Oilseeds, reporting a 30% full year profit increase, has warned that UK oilseed crop production for 2024 could fall below a million tonnes for only the second time since the Millenium.

The co-operative has reported an EBITDA of £2.24 million on revenues of £172.41 million (excluding pool revenues) for the year ended June 30th 2023, compared to £1.68m and £174.49m in the previous year. Net worth rose by 23% to £17.40m. It is the third successive increase in annual profitability, and points to another record member profit share when the figures are finalised.

“Considering the challenges the market has been facing, and following a period of unprecedented price volatility, we are proud to announce another set of extraordinary results for our member co-operative,” states managing director James Warner who succeeded Chris Baldwin in September this year.

“During the 2022/23 campaign, we managed to maintain our market-leading position in both UK oilseed rape crop marketing and our share of the UK’s certified seed market, both of which remain at 30%.”

The latest full year saw total commodity tonnages traded by the co-operative at similar levels to the previous one at 415,964 tonnes. But Mr Warner notes that 23% – nearly 100,000 tonnes – of the volume comprised non-OSR commodities including oats, beans, peas, linseed and hybrid rye as well as rapemeal for animal feed as the business diversifies its crop portfolio. Non-OSR crops contributed 43% of margin.

Data collected by the business points to an average UK OSR yield of 3.1 t/ha in 2023, a 17% fall from the 3.7 t/ha in 2022, although only 5% below the 5-year average. This points to a 1.21 million tonne 2023 crop, 11% down on the prior year’s 1.36m tonnes. Average oil content has come in at 44.56% this year (46.34%).

“Despite a damp and rather drawn-out harvest, our team performed admirably,” says Mr Warner. “Our strategically positioned storage network across the length and breadth of the country continues to support our members. Particularly pleasing has been the fact that the challenges around haulage availability and a lack of lorry drivers that have plagued the industry in recent years seem to have abated.”

Looking ahead, United Oilseeds estimates that the UK rapeseed planted area for harvest 2024 has dropped to 354,000 hectares, after allowing for some re-drilling – a reduction of some 15% year-on-year. The company’s own OSR seed sales are down 14% to 93,265 hectares.

But as much as 10-15% of the total UK planted OSR area could already have been written off, leaving a viable crop area of between 305,000-320,000 hectares for harvest 2024. Assuming average yields, this could result in a UK crop below one million tonnes for only the second time this century – which means up to 1m tonnes of imported seed will be needed.

James Warner

“This planting season, there have been a number of headwinds facing OSR growers,” notes Mr Warner. “Establishment setbacks, pest concerns, high input costs and significant funding changes allowing growers additional alternative revenue streams – such as the SFI and CS scheme to name a couple. As a result, we have seen plantings for 2024 harvest drop compared with last year.”

The company says the trend from conventional varieties towards hybrids continues, with the conventional certified OSR seed market dropping by 43% to just under 45,000 hectares or 22% of the market. High Oleic Low Linoleic variety plantings fell by 34%.

Total certified OSR seed sales are estimated to be down 14% to 321,000ha, but Farm Saved Seed use has also dropped sharply this season, with a 50% fall to 27,000 hectares.

“We continue to have market leading varieties, with Aurelia continuing to be the number one choice amongst UK growers, commanding a dominant market share amongst the UK’s hybrid market,” adds Mr Warner.

“It’s been an incredibly challenging time for OSR growers in the UK,” he concludes. “Establishment issues, particularly due to Cabbage Stem Flea Beetle, followed by the terrible flooding we have seen across much of the East Coast, has meant the crop has got off to a tough start, with some inevitable losses along the way.”

“Despite the challenges growers face, there are a number of reasons to remain upbeat about future prospects for the OSR market in the UK. Domestic demand for rapeseed and its products remains robust, meaning we have ample existing demand to which to market our crops.”