Change in grain buying market

May 12 2005 By The Journal

Grainfarmers, the country's largest grain marketing business, has announced new arrangements for ex-farm grain purchasing for the coming harvest.

Effective from July 1, 2005, Grainfarmers will no longer use Dalgety Masstock arable field staff to assist with the procurement of grain from farmer suppliers in certain areas of the UK.

Instead, Grainfarmers' own farm business managers and regional grain buyers will take on direct responsibility for servicing all of the company's farmer customers' grain marketing and crop input needs.

Tim Pollock, managing director of Grainfarmers plc, said: "In view of the probable impact of the MTR upon UK production, we have decided the agency arrangements in place with Dalgety Masstock in certain areas of the country are no longer beneficial for our farmer customers as they are increasing the complexity and overall costs incurred in marketing and handling their ex-farm grain.

"With increasingly volatile grain markets, growers will benefit from obtaining direct access to our team of grain marketing specialists, rather than working through a generalist intermediary.

"Our grain marketing specialists are best placed to provide first hand advice on our comprehensive range of marketing and risk management options, including growers club supply partnerships with some of the country's leading grain users such as Rank Hovis and Coors Brewing."

Grainfarmers plc acquired the grain marketing division of Dalgety Arable Limited in May 2003 and as part of the terms of the transaction, Dalgety Arable's field staff have been acting as grain buying agents for Grainfarmers.

These arrangements continued following the acquisition in December 2003 of the residual Dalgety Arable Limited business by Masstock Arable (UK) Limited.

Grainfarmers handled 3.85 million tonnes in the year to June 30, 2004, and expects to handle a similar tonnage in the year to June 30, 2005, representing some 20pc of the UK grain market.