12 May 2000

Tough year sees CWS lose £0.5m

By Robert Harris

BRITAINs biggest farmer, CWS Farms, lost £500,000 in 1999, a year it describes as probably the most difficult for farming since the 1920s.

The company, which farms over 32,000ha (80,000 acres), reckons the weak k was mainly to blame. Turnover increased by nearly 4% compared with 1998, mainly from increased potato and vegetable production, but even this failed to offset the currency effect.

"We knew we were not going to have a good result – the whole farming world could have predicted that," says general manager, Mike Calvert. "But the figures are somewhat worse than expected."

Combinable crops were not far off budget, he adds. But low year-end valuation of potato stocks, poor pig prices – which prompted CWS to axe one-third of its 1200-sow herd – and continued pressure in the dairy sector hit hard.

CWS made a £1m profit in 1998. The year before that, it made £3m and twice as much in 1996, although the farmed area was about a third smaller, predating the acquisition of Broadoak Farming.

"Putting in 1996 values across our total area shows that we have suffered a reduction of £10-£12m in income," says Mr Calvert.

More efficient

"Improved efficiencies have taken out about £4m in costs. But unless you are a badly managed business in the first place, you can no longer get fixed costs down fast enough to cope."

lAssociated Co-operative Creameries, the Co-ops distribution and manufacturing arm, reported a 5% increase in trading profits over the previous year, at £17.6m.

Gains came mainly from distribution. The milk business – which accounts for about 15% of ACCs turnover – suffered a continuing decline in doorstep deliveries, though increasing sales to retailers offset this.

Raw milk prices fell about 5% during 1999, but prices in the shops went down even faster, depressing margins, says CWS. Milk sector sales slipped from almost £280m in 1998 to just over £271m last year. &#42