Scotland’s largest machinery ring is to ask its members if they want to set up a fertiliser-buying group to help them save costs and negotiate better deals.
Ringlink (Scotland) managing director Graham Bruce floated the proposal at the co-op’s annual meeting in Inverurie last night.
Mr Bruce said the group could potentially secure better deals from fertiliser manufacturers and take some of the pricing volatility out of the market. He maintained existing arrangements were not working to the benefit of farmers, citing the example of those who bought fertiliser earlier in August and who have paid a £40 premium a tonne as prices have collapsed since then.
Chairman Andrew Moir said it was in members’ interests to actively consider the idea as it had the potential to give them considerably more power in the market to negotiate much better deals than they can get at the moment individually.
Mr Bruce acknowledged other farmers’ co-operatives and merchants operated pool buying arrangements, but these were limited in their scale. He also said they too could join the group to give it even greater power. He believed that between 60-70% of Ringlink’s near 3,000 members bought fertiliser annually. If they all ordered just one load through the group it would equate to about 55,000 tonnes.
“If every machinery ring member in Scotland was also included then that is potentially a huge block of fertiliser,” he added.
Mr Bruce said Ringlink had seen fertiliser sales through its own commodity trading operation increase 20%. But sales were slow this back-end as the cash flows of many farm businesses were under pressure.
That, coupled with falling world prices, had led to a huge downturn in demand and the likelihood that orders will be made only at the time the fertiliser is needed in February, which would put huge pressure on blending plants and hauliers to deliver at the last minute.
The group could potentially negotiate better prices which would allow orders to be phased through the season. Mr Bruce was speaking as Ringlink revealed a 15% increase in turnover to £42.72million. Its core business of providing farm machinery reported an 8% rise, with labour demand through Ringlink up 14% and at its Ringlink Services sister business ahead 4%. Commodity trading of fuel, feed and malting barley showed a 19% rise in sales, with volumes up too.
Turnover in the year to July 31 was up £111,493 to £1.248million, while operating profits showed a gain of £25,838 to £138.541. Pre-tax profits were £168,464, against £139,567. The co-op is this year celebrating its 25th anniversary. Mr Bruce said it was now handling 50,000 calls monthly with 57,000 member transactions over the last year worth an average of £740 each.
Ringlink Services, which focuses on providing labour and training, reported turnover of £3.728million, a £304,283 increase. Pre-tax profits were down £24,737 at £82,806. The operating surplus at £70,121 fell £28,443.