Profits have fallen at Frontier and Gleadell Agriculture after grain traders said a smaller wheat crop in 2017 and limited market volatility reduced opportunities for making money.
Agronomy and grain marketing company Frontier Agriculture, which controls the biggest slice of the UK grain trading market, saw pre-tax profits slide by 18% from £34.8m to £28.4m in the year ending 30 June 2018.
The company, which is co-owned by poultry giant Cargill and Associated British Foods (which also owns British Sugar and Primark), said trading incomes had partly been suppressed by higher haulage costs generated by moving surplus grain from southern England to the north.
Declining incomes across the grain marketing sector has caused a wave of consolidation in the past 18 months, with Frontier increasing its share of the market in 2019 after being contracted to take on the marketing of Cambridgeshire-based Fengrain.
Gleadell, which was fully acquired by ADM Agriculture in January this year, also saw profits fall in the year ending 30 June 2018 by 60% from £2.3m to £903,000, blaming a competitive market at the farmgate and with end consumers.
ADM Agriculture is the UK segment of global food processing giant Archer Daniel Miller, which has more than 330 food and feed ingredient manufacturing facilities worldwide.
Gleadell will no longer trade as a separate entity to ADM in the future but will be part of the wider ADM group in the UK, which also owns seven flour mills across England and Scotland and the Erith oilseed crushing plant, among other assets.