Mole Valley Farmers has reported its financial results for the year ending September 2023, including a group operating loss of £7.6 million for the year.
The farmer-owned cooperative said the challenging trading environment and rising costs resulted in the loss.
Its sales are largely unchanged on the previous year and stand at £610 million.
Mole Valley Farmers said: “Commodity deflation and falling raw material markets, set against a backdrop of farmers battling a reduction in output prices, prolonged wet weather and wider cost of living pressures, significantly impacted our financial performance.
“Increased costs through higher interest rates, energy costs and wage inflation also contributed to the challenging trading conditions for the year.”
The cooperative said its financial performance was further exacerbated by the loss of sales revenue associated with an external IT incident in August 2023.
It said its performance was also impacted by strategic repositioning within its feed division, where over-supply in a very competitive marketplace restricted margins whilst costs of production and delivery increased.
Mole Valley Farmers said it has conducted a full operational review of the business to improve operational efficiency and strengthen its “core business areas” of agriculture and rural retailing.
A ‘challenging’ year
Chief executive of Mole Valley Farmers, Jack Cordery, said it is disappointing to report a trading loss, given the hard work of all staff, the support shown from customers and suppliers and the significant work taken to mitigate against inflationary pressures.
“Last year was one of the most challenging in the 63 year history of Mole Valley Farmers. Falling raw material markets impacted profitability as we reduced significant stockholding positions, particularly in our feed and fertiliser business,” he said.
“A falling milk price inevitably hit confidence amongst dairy farmers, and the unseasonal weather – with prolonged wet periods in the early spring and then summer – reduced demand across many of our key agricultural product lines.
“To then experience a significant external IT incident last August which targeted our core operating systems, resulting in a period of significant trading disruption, was extremely disappointing.”
Like other businesses, Cordery said Mole Valley Farmers’ costs also increased and it is mindful of its position as a farmer-owned cooperative about how it manages these to minimise passing additional costs down to its farmers.
“We have taken action across our business to address the various challenges and to remove cost and improve efficiency. The business remains resilient and is well supported by our customer and supplier base,” he said.
Cost control
Mole Valley Farmers said cost control remains a key priority and volumes in its feed business have grown, demonstrating its “nutritional competency, levels of service and effective customer management”.
In February 2024, over 50,000 customers signed up to its improved country membership retail scheme.
“Despite a challenging outlook for the agricultural sector, unpredictable weather and pressure on farmgate prices, we are well supported by customers and suppliers across all areas of our business,” Cordery said.
“We have continued to invest, including in our new dedicated organic feed mill in Uffculme located on the Devon and Somerset border, our Soil to Silage service which provides a holistic approach to soil and forage management, and our specialist teams who provide industry leading advice and expertise.
“A strong Mole Valley Farmers is vital for our farmer shareholders, members and the wider sector.
“We remain ambitious for the future and we have strong plans in place to ensure we are able to provide the products and services our farmers require, working with them to fulfil our core purpose of helping them improve productivity, profitability and sustainability.”
