Farming leaders raise concern over major grain market merger

PUBLISHED: 10:28 21 January 2019 | UPDATED: 11:10 21 January 2019

The National Farmers' Union (NFU) has raised concern over major mergers in the grain market.  Picture: James Bass

The National Farmers' Union (NFU) has raised concern over major mergers in the grain market. Picture: James Bass

Archant Norfolk © 2014

Farming leaders have voiced concern over a major merger in the grain market which they claim will reduce farmers’ options and “drive down competitive trading”.

Multinational grain buyer and processor Archer Daniels Midlands (ADM) has signed an agreement to buy out Gleadell Agriculture, which has an office in Swaffham and operates the grain terminal at Great Yarmouth Outer Harbour.

Gleadell, established in 1880 and now a leading supplier and exporter of combinable crops, was already half-owned by ADM but now the US-based corporation will purchase the remaining 50pc from French agricultural co-operative InVivo in a deal which includes Gleadell’s wholly-owned subsidiary Dunns (Long Sutton) Ltd.

READ MORE: Grain trader set to be bought out by major US shipping corporation

ADM said it intends to merge Gleadell and Dunns with its existing UK businesses to create ADM Agriculture Ltd – a move which the firm says it took “not only to continue our strategic growth, but also to support our farmers and our customers as they work to address fast-growing consumer demand”.

But Tom Bradshaw, combinable crops board chairman for the National Farmers’ Union (NFU) said he was worried about the implications for arable growers.

“The UK grain market is fiercely competitive and the arable sector is facing many commercial challenges, so it isn’t surprising to see this kind of consolidation in the grain supply chain,” he said.

“The NFU is concerned that this merger could add extra financial pressure on arable businesses as it would massively reduce farmers’ options within the grain market, driving down competitive trading and reducing farmers’ chances to find the best price for their product.

“Although it is encouraging that international businesses are investing in the UK grain industry, the Agriculture Bill must protect British farming businesses from dominant supply chains or else it runs the risk of favouring cheaper, lower quality imported grain over home-grown crops.”

The deal announced last week is subject to regulatory review and is expected to be completed during the first quarter of 2019.

It is another indicator of consolidation in the grain marketing sector, following the announcement earlier this month that East Anglian grain co-operative Fengrain, based in Wimblington, near March, had agreed to contract its grain trading and marketing services to Frontier Agriculture, the UK’s largest agronomy and grain marketing business.

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