Fengrain contracts grain marketing to Frontier

Fengrain, the UK’s second-largest farmer-owned grain co-operative has agreed to contract its grain trading and marketing services to Frontier Agriculture, the UK’s largest agronomy and grain marketing business.

The company was the last significant independent grain trader in Cambridgeshire after the departure of Dalmark in 2018 and Wellgrain going into administration in 2017.

It trades around 800,000t of grain annually, primarily to domestic end users such as Weetabix, and opened a second office in Kent in 2015.

See also: Farmer-owned Fengrain posts £2.5m pre-tax loss

The company said it is still negotiating with Frontier over the terms of the agreement and it is the intention of the Fengrain board to communicate full details of the new arrangements to members by mid-February, with the sub-contract coming into effect no later than 31 March.

Fengrain’s storage and handling facilities will remain in the ownership of its existing farmer members.

The company made losses of £2.5m in the year ending 31 July 2017 – its most recent set of results, which it blamed on investments in new storage facilities and a downturn in the agricultural merchanting sector.

Core storage activities

Fengrain chairman Paul Wilkinson said: “By concentrating on our core storage activities we can subcontract our grain trading and marketing to Frontier, which has the scale and financial capacity to trade through market volatility to the benefit of its grain marketing customers.

“I am excited by this new business model, which I believe will add value to our members and serve all our stakeholders well into the future.”

Formed in 2005, Frontier is half-owned by Cargill, the world’s largest privately owned company, and half owned by ABF, which also owns British Sugar.

It has 44 sites across the UK and employs more than 1,100 people.

It made a profit of £27.4m off a turnover of £1.4bn in its most recent set of accounts for the year ending June 2017, and has a history of growth through acquisition.

In the past few years it has purchased Shropshire-based agronomy business BCW and Anglia Grain Services.

It already has a significant presence in Cambridgeshire after becoming the grain marketing partner for Camgrain, which has 500,000t of storage.