Farmers' cooperative saves members £155,000

A wet harvest, which meant that farmers’ combines and grain dryers burned more fuel to bring in and safely store high-moisture crops, was the main reason why the UK’s largest farm inputs purchasing and combinable crop marketing group ordered a record amount of fuel on behalf of its Members during the three months from July to September 2010. In doing so saved, the AtlasFram Group saved them more than £155,000.

Members purchased more than 15.5 million litres of fuel during that period, compared with 13.2 million litres from July to September 2009 and 14.7 million litres in 2008. Despite the demand, the Group was able to secure fuel at 47.7p - 49.15p/litre, giving an average price of 48.565p/litre, which was mid-way between the figure paid in 2008 and 2009 and represented a saving in excess of 1p/litre. Fuel prices over the harvest period this year were approximately 20% above the low levels of 2009 when demand dropped due to the recession, but about the same amount below the 2008 average.

"More than 90 per cent of AtlasFram Members purchase the fuel which they need to operate their businesses through the Group and we have consistently saved them money, as well as the hassle of ’phoning around for the best price, because we do all of that for them," explains Graham Aldrich, the Group’s Fuel Purchasing Specialist.

"This year demonstrated the benefits of purchasing fuel, at the best rates, on the ’spot’ market. Though many farmers claim to like the idea of being able to buy fuel ’forward’, doing so this year would have cost them significantly more, largely due to the 3p-4p/litre ’risk margin’ which suppliers build into forward contracts. These types of contract also pose a risk in that they obligate buyers to take fuel at the agreed price, even if the ’spot’ market is trading below that level."