© Tim Scrivener

There’s strength in numbers when it comes to securing the best deals on seed, fertiliser and agrochemicals.

That’s the business basis behind buying groups, which exist to bring economies of scale to individual farm businesses and give them far greater influence in the market than they can achieve on their own.

By co-ordinating the purchasing of farm supplies, the groups are able to secure better prices and terms through bulk ordering and discount deals – passing on the savings to their farmer members, who are able to order products as and when they need them.

See also: Farm input prices fall…but not enough

But for many members of such groups, the benefits go beyond having a better position and more power at the negotiating table. They also use them as an extension of their farm office, saving them time and money on administration, while giving them access to specialist services and professional advice.

Other benefits

For North Essex farmer and contractor James Nott, the original decision to join Fram Farmers was made to increase his purchasing power – but he has been pleasantly surprised by the other advantages that his business has experienced.

“It’s become an extension of our farm office. They are there when we need them, ordering is much easier than it was, while only receiving one invoice per month has saved us a great deal of time and effort.”

He is particularly impressed with the fuel purchasing scheme, which allowed him to lock into one price for July, August and September, ensuring that fuel was delivered throughout the harvest period to various delivery points, in the quantities that he specified.

“I just ring or email, and the rest is taken care of. I’m no expert on fuel purchasing, so the business has used their knowledge and contacts to get us the best price and service.”

For Somerset-based mixed farmer Tom Dening, who is a member of Anglia Farmers, a friend’s suggestion that he should join the group has made an enormous difference to his office workload.

“I benchmarked my invoices at the start and could soon see that I would get my membership fee back in no time at all.”

Knowing that you are getting the cheapest deal is just one aspect, he says. “With our insurance, for example, we saved £5,500 immediately. But we also got better cover, especially on the livestock.”

He has also purchased wearing parts, red diesel, oil, plastics, phones and electricity through the group – just by ringing one contact. In addition, forward buying of feedstuffs has become possible, thanks to access to better market information and early warning of any price or availability movements.

“It’s made things much easier for us. Our office has gone paperless, so all of our invoices are by email and the logistics are much more straightforward. It has saved us plenty of office time.”

How it works: Strutt & Parker buying group

There are numerous advantages to being a member of a buying group, believes Robert Gazely of Strutt & Parker, with much cheaper input prices being just one of those.

“Obviously the better purchasing power that buying groups have is a major attraction,” he says. “But there are other gains to be had which can be just as important to members – product availability, up-to-date market information and advantageous payment terms, to name a few.”

Typical savings from being in the Strutt & Parker Buying Group – which is free of charge to all of the company’s agronomy clients – are between 14-16%, he reveals.

“If you have any doubts about joining such a group, it is possible for us to take a year’s worth of chemical invoices from your business and benchmark them against our figures. It shows the sort of savings that can be achieved.”

In the Strutt and Parker buying group, all product rebates or savings are returned to the grower members, points out Mr Gazely. “The whole amount goes back to our clients, who don’t pay a fee to be part of the group. It is all very transparent.”

For seed, seasonal tenders are received from at least seven suppliers. Fertiliser is done slightly differently, with the company doing a seasonal compilation of fertiliser groups, then having quarterly meetings with distributors and half yearly meetings with manufacturers.

“We’re bulk ordering to get the economies of scale,” he explains. “The fertiliser market works in a different way to that for seed and sprays, so there are trust deals done to insure against market movements.”

For agrochemicals, weekly tenders are received from nine distributors. The company then does some comparative analysis and produces an update, showing the best deals for both distributors and products, as well as producing an average price.

“We circulate this information widely, so that the best decisions can be made.”

While the pricing information is mainly for authentic, labelled products, it is possible to purchase generic agrochemicals and parallel imports by prior agreement, he reveals.

“Fuel works in a very similar way to sprays, and we have also been able to secure fleet discounts on machinery. So there are other areas of the farm business that can benefit.”

The pros and cons of using a buying group

• Management Matters is a new Crops series aimed to help you manage your arable business more effectively. In the coming months, we will be tackling a range of topics. Catch up with previous pieces on our website

February: How to recruit and retain good arable farm staff

March: How growers can slash costs by sharing kit and labour