How have farmers made significant savings from co-op membership?
- Credit: Simon Page
Farmers have saved nearly a tenth of costs on key inputs thanks to membership of a not-for-profit group based in Suffolk.
Farmers' co-op Fram Farmers carried out a benchmarking survey which found an average financial saving of almost 10% on commodities sourced through the group compared with the wider market.
The study - by its Next Generation Team members Tim Gilbert, Thomas Coulter, Tom Mountain and Sophie Clarke - compared prices for 15 key inputs - including fuel, electricity, insurance, crop protection products and fertilisers - on a month-by-month basis going back as far as 2011.
MORE - Farmers 'encouraged' by results of AD by-product field trialsHighlights included a 22% saving on UK ammonium nitrate fertiliser ordered through the Fram Farmers purchasing pool, 18% for insurance, 11% on granular urea (pool), 11% for electricity, 11% on heating oil and 8% for gasoil.
Overall, members of the Framlingham-based group saved an average of 9.67% across 15 key inputs and an additional 2.76% on crop protection products where Fram Farmers purchased these products on their behalf, rather than doing so themselves through a chosen supplier using their Fram Farmers account.
Chief executive Richard Anscombe, who commissioned the survey, said those outside the co-operative might be surprised at the findings, but it showed the "very significant" savings which the group's buying power brought.
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"One never knows what the outcome of such an exercise might be, and if it highlights shortcomings there's even more reason to do it," he said.
"However, this demonstrated clearly the value of Fram Farmers membership.
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"Aggregating purchasing volumes allows us to negotiate strongly with suppliers, who value dealing with us because we guarantee them payment, are professional and efficient to deal with.
"Our 50 expert staff have access to 'live' information for their sector, constantly monitor the markets and place orders at the most favourable time for our members. For smaller purchases this will be done automatically, but for larger orders, such as fertiliser, we advise members when market conditions are favourable and suggest they commit at that time."
Farmers looking back over five years would be surprised at what 9.67% in cost savings represented.