Jump in profits for Openfield Agriculture
© Tim Scrivener Profits at farmer-owned co-operative Openfield Agriculture have trebled, with soaring global feed and fertiliser prices following Russia’s invasion of Ukraine the main explanation.
Turnover increased by 30% to £670m as a result of price inflation, while the co-op made a pre-tax profit of £3.7m for the year ending 30 June 2022, up from £1.1m the previous year.
Distribution costs also rose as a result of limited haulage availability and inflation.
See also: Feed wheat slumps to £182/t as global pressure mounts
The company has, therefore, decided to increase its existing fleet of 33 lorries to 72 in a bid to offset some of these logistical issues.
In its annual report, Openfield chief executive James Dallas said that the marketing year was anything but “business as normal” due to the Ukraine war.
“This led to a greater demand for exports as the importing countries reacted quickly over fears of supply,” he said.
“All of this led to a sharp increase in global prices, which, to a large extent, continues today driving strong food inflation.”
Looking forward
Interest rates, commodity prices, liquidity, credit, exchange rates and economic factors were some of the key risk areas identified by the business.
Mr Dallas said the current year will be no less challenging with factors such as market volatility and supply chain challenges continuing to have an impact.
When added to a tightening economic outlook, these factors present the industry with major inflationary instability.