United Oilseeds Crop Trading and Seed Sales Generate 18% Rise in Annual Profits
Break crop specialist and independent farmers’ co-operative United Oilseeds, has announced an 18.19 % rise in pre-tax profits to £1,786,207 for the trading year ending 30th June 2022, compared to £1,511,249 profit during the same period the previous year.
The co-operative’s annual turnover was also up, rising to £174,494,097, from £171,973,546 the previous year, whilst its net worth rose 13.17 % to £15,339,963.
Total commodity tonnages traded by United Oilseeds rose by 6.5%, amounting to 421,132 tonnes compared with 395,557 tonnes the previous year.
Last year, the farmer-owned co-operative announced a record profits redistribution payment to its trading members of £440,000, which was the highest it has ever made in its 56-year history. A profit share payment to trading members for the 2021-2022 financial year will be announced in December.
“This is an outstanding set of results for our members’ co-operative,” said Chris Baldwin, Managing Director of United Oilseeds. “We have increased our market-leading share of the UK’s oilseed rape crop marketing and grown our share of the UK’s OSR seed market, whilst significantly increasing sales of other break crops.
“United Oilseeds has a 30% share of the UK’s oilseed rape market and a similar share of finished crop marketing,” said Mr Baldwin.
United Oilseeds has the largest tonnages of oilseed rape under pool management and its marketing pools consistently outperform the average market price. For example, the United Oilseeds Harvest Pool price 2022 achieved £600.49 per tonne delivered. This beats the average delivered market price by £59.76 per tonne. The lowest ex farm price for harvest movement traded as low as £495 per tonne.
“Whilst we have seen OSR achieve record prices during this marketing period, it is worth highlighting the volatile nature of rapeseed market prices. To a large extent, volatility is the defining characteristic of this market and, whilst some growers may be tempted to hold on for the highest price, many choose to mitigate risk by selling their crop through our pools and achieve an above average market price for their crop,“ said Mr Baldwin.
Seed Market Trends
The UK OSR area planted for harvest 2023 is estimated at 412,758 ha. This is an increase of 14.66% on the Defra estimate of 360,000 ha area harvested in 2022.
“Our annual results reflect the increasing health of the rapeseed seed market and our increasing success across all its segments. Overall, the United Oilseeds sales area for 2022 has grown by 30.76 % to 110,389 hectares.
“Market drivers such as the shortfall in the supply of OSR for domestic UK use has helped to support prices which, in turn, encourages more growers to plant rape. However, our impressive seed sales performance is also due to the top varieties we offer to farmers,” said Mr Baldwin.
Across different segments of the OSR seed market, United Oilseeds has the market leading varieties. For example, Acacia has established a dominant 40.63% share of the UK conventional market, Aurelia a 30.15 % of the hybrid market, Matrix a 63.24% share of the Clearfield market, whilst Crome now has a 48.32% of the club root segment.
“It is worth noting that in terms of variety type planted by growers, there has been a clear swing to hybrid varieties. From our own sales over the last six years, we can see that the area planted to hybrids has increased from 43,609 hectares in 2017 to 86,835 hectares in 2022, whilst the conventional area has dropped from 58,267 hectares to 23,240 hectares over the same period,” said Mr Baldwin.
Mr Baldwin went on to highlight the trading conditions under which the co-operative’s positive performance has been achieved:
“Alongside our farmer members and customers, United Oilseeds has traded in an environment of unparalleled economic and operational challenges and delivered a significant increase in profits and net worth.
“Significant increases in energy, farm inputs and transport cost has meant that farmers have had to carefully protect and review expenditure and resources,” he said.
“A greatly reduced availability of haulage and lorry drivers also made logistics and transport to and from stores and ports particularly challenging, especially during harvest. However, I am pleased to say that through improved efficiencies and control of overheads, United Oilseeds has enhanced its margins and financial performance.”
UK Oilseed Production
Whilst the UK oilseed rape area is increasing, production will not be enough to meet the UK’s annual domestic demand, which has reduced from 1.9 million tonnes in 2021 to 1.8 million tonnes for 2023, owing to the closure of the OSR processing plant in Hull. Early estimates for the UK’s 2022/3 planted area are around 412,758 hectares, up from an estimated harvested area in 2022 of 360,00 hectares.
“This mean that the UK will be left some 438,000 tonnes short of self-sufficiency and with international supplies also hindered by availability and the war in the Ukraine, the outlook for OSR market prices remains bullish,“ says Mr Baldwin.
“I remain very confident in the future for oilseed rape in the UK. There is a pipeline of new
varieties coming to market with improved traits and performance characteristics that will appeal to our growers. At the same time, UK demand for OSR remains high which means British farmers can grow oilseed rape for a domestic market that will remain buoyant over the next few years.”
Note to Editors
United Oilseeds is one of Britain’s foremost national agricultural co-operatives. Owned entirely by its 4,500 farmer members, it is the UK’s only oilseed rape marketing specialist. In addition to OSR, it also trades linseed, oats, pulses and hybrid rye. It is the parent company of the expanding small seed specialist, Hubbards Seeds, which sells environmental crops, maize and grass.
For further media information: Issue Date: 3rd November 2022