Farming co-operative Fengrain contracts its grain trading operations to major agri-business
PUBLISHED: 20:19 10 January 2019 | UPDATED: 20:20 10 January 2019
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An East Anglian grain co-operative will concentrate on its core storage activities after agreeing to contract its grain trading and marketing services to the UK’s largest agronomy and grain marketing business.
Fengrain, the farmer-owned group based in Wimblington, near March, is still negotiating the terms of the agreement with Frontier Agriculture, and its board says it intends to communicate full details of the new arrangements to members by mid-February, with the sub-contract expected to be granted no later than March 31.
Fengrain’s storage and handling facilities will remain in the ownership of its existing farmer members.
The company made losses of £2.5m in the year ending 31 July 2017 – its most recent set of results – which it blamed on investments in new storage facilities and a downturn in the agricultural merchanting sector.
Fengrain chairman Paul Wilkinson said: “Global and domestic markets remain volatile and unstable making grain trading increasingly more challenging.
“By concentrating on our core storage activities we can subcontract our grain trading and marketing to Frontier which has the scale and financial capacity to trade through market volatility to the benefit of their grain marketing customers. I am excited by this new business model which I believe will add value to our members and serve all our stakeholders well into the future.”
Frontier managing director Mark Aitchison, said: “Frontier has a well proven track record of providing grain marketing, risk management and grain trading services to farmer-owned grain businesses.
“With our complete understanding of the farm gate and our wide access to upstream markets we can bring something unique to Fengrain members and farmer customers – helping to maximise their grain marketing performance and protecting their storage investments.”