New Additions to SAOS Membership too!

SAOS has welcomed two new members over the summer - Banff and Moray Grain, and the Seed Potato Organisation - further boosting our combined membership turnover of around £1.5 billion.

Established in 1998, Banff and Moray Grain was originally formed as a dedicated producer group supplying malting barley to WN Lindsay Ltd. Following the acquisition of Lindsay’s by Simpsons Malt Ltd, the co-op moved its allegiance to supply Boortmalt. All the co-op’s malting barley goes to the Chivas distillery at Glenlivet for malt whisky production. Banff and Moray Grain markets a total of around 70,000t of spring malting barley on behalf of its 130 farmer members, also handling logistics and payments. While it has no central grain store, there is some long-term storage provided by members on-farm.

The co-op’s Chairman, Stuart Geddes, Dallachy Farm, said: “The Board recognised that the business has grown over the last decade, and that we needed to strengthen our governance practices to ensure we meet our increasing obligations to members and customers. By joining SAOS, we will benefit from the skills and experience that its staff can bring, plus we can gain access to the wider network of other farmer co-ops. In an increasingly uncertain and volatile world, it is important we continue to improve our Board’s practices to ensure the co-op’s continued success.”

SAOS’s Jim Booth added: “We’re delighted to have Banff and Moray Grain join SAOS. The malting barley sector is critically important to Scottish agriculture and, with Banff and Moray Grain joining Aberdeen Grain, East of Scotland Farmers, Highland Grain and GrainCo Scotland as SAOS members, their combined tonnage is around a third of the market share. This will no doubt create further opportunities for our grain co-ops to benefit their farmer members.” The other new member, the Seed Potato Organisation, has emerged following the cessation of AHDB Potatoes and the resulting loss of services and momentum. Seed potato growers identified several specific issues where there was a need for a seed-orientated organisation to support the development of their sector. As we’ve reported previously, beginning in 2022, meetings were arranged across seed potato growing areas to discuss the merits of a successor body, with the resulting consensus that growers were most interested in an organisation that represented sector specific interests.

For the sector to thrive, it is essential that a grower-led leadership body is in place to coordinate activities and be the focal point for stakeholders. The Seed Potato Organisation has been established as a co-op run by seed growers for the benefit of members, establishing a lean organisation focused on activities relevant to the seed industry including innovation, research and technical services; support and development of markets for seed potatoes; and ensuring economic and environmental sustainability.

SAOS’s Patrick Hughes said: “The UK seed potato sector has many strengths, but to protect and enhance its global reputation requires a united and dynamic organisation that can work in partnership with Government organisations and stakeholders to develop an efficient sector producing high quality seed potatoes.

“The creation of the Seed Potato Organisation co-op enables growers to set their own agenda for the future economic and environmental sustainability of the seed potato sector. Numbers have been growing throughout 2023, and the membership is now around 25% of the seed potato grower base. We encourage more seed growers to engage and help establish an even stronger united voice for the sector.”

The best way to compete is to collaborate. Grain traders, meat processors, supply chain businesses and supermarket multiples are fewer in number but bigger than a generation ago. In this dog-eat-dog world there a few big dogs, and their bite is worse than their bark. In comparison, there are a lot of farm businesses (c.20K farm businesses in Scotland complete an annual IACS form.)

Co-ops are already here. SAOS member co-ops’ economic output adds up to £1.5bn each year, about a third of Scottish farming’s total. But co-ops are not just about economics. They focus on member benefit and putting farmers first, concentrating on seven principles:

1. Co-ops are open to everyone. If you can use their services and accept the responsibilities of membership, you can ask to join.

2. Members are in control. Just like NFU Scotland, individuals are elected to positions of power, and held to account by members.

3. Member ownership. If you join you put in money –contributing to the co-op’s capital. This pool of members’ money is democratically controlled. Surpluses are reinvested, not paid out as bonuses.

4. Co-ops are autonomous and independent. Working with, or accepting funds from others, are done on terms that ensure control is retained by the co-op.

5. Skills, education, and communication are important. Training is available for everyone. And the benefits of co-operation are communicated widely – as you are learning right now!

6. Co-operatives co-operate. By working together, co-ops can be strengthened and achieve common goals.

7. Community is key. Co-ops work for the sustainable development of their communities. Whoever they are. We look forward to sharing more of David’s thoughts in due course.

People are our biggest asset, so prioritising how we nurture and develop individuals to gain the right skills, knowledge, and attitude to help them progress in their career, is vital. Developing talent to support a resilient, skilled workforce, able to deal with multiple challenges and opportunities prevalent in our industry will have a direct effect on the success of agriculture and rural businesses in Scotland. SAOS believes that developing capability is one of the most effective ways to improve individual, business, and industry performance. Over the last six months, we have invested time and resource to understanding more clearly where the training needs are across the industry, and how we can support individuals to access the best expertise in the field. We have an exciting winter programme ahead with some firm favourites being delivered, alongside some new, ‘in demand’ courses. We hope that you will see benefit in supporting these courses both for the individual as well as a business perspective. SAOS is committed to supporting skills and knowledge renewal through our training and events and we will circulate a short Training Needs Analysis Survey in early winter to gather views - please respond to this, helping us to support you and your training needs.

• Growing Tomorrow’s Leaders - 11th Oct ’23 –20th Mar ’24 (Hybrid) – FULLY BOOKED

• The Art of Being a Successful Chairperson - 24th & 31st Oct ’23 10-12 midday (online)

• Understanding Financial Accounts - 25th Oct ’23

- Landmark Hotel & Leisure Club, Dundee

• Effective Member Comms and Marketing - 14th Nov ’23 - Landmark Hotel & Leisure Club, Dundee

• Co-op Management in Practice (CMiP) - 15th & 16th Nov’23 - Landmark Hotel & Leisure Club, Dundee

• Consultative Sales and Selling Skills - 28th & 29th Nov ’23 - Stirling Enterprise Business Park, Stirling

• Coaching for Managers - 29th Feb ’24Landmark Hotel & Leisure Club, Dundee

• Negotiation and Dispute Resolution - 27th Mar ’24 - Landmark Hotel & Leisure Club, Dundee

More info on courses, and the opportunity to register your interest are at: https://saos.coop/events-and-training/ Please do get in touch with Anna to discuss any training needs you have: anna.delday@saos.coop

Hamish Campbell Stuart, lifelong and passionate advocate for Scottish agriculture and making Scotland a better place, for his children and grandchildren, and ours, passed away on 8th May 2023.

Hamish, or James as the passport and driving licence authorities would have it (a source of irritation and the occasional administrative hiccup) was a man of many accomplishments. By turn, inspiring with his encyclopaedic knowledge, experience and vision, then occasionally infuriating with his stubbornness. He did not suffer fools gladly. Many unable to see beyond his wild hair and plastic crocs, were in for a rude surprise at his intellect and insightfulness, not to say plain speaking (in English, but also, having been schooled as a child in Belgium for a while, French). Yet he always had time for those trying their best and willing to listen to his ideas - and this applied equally whether you were a farmer, a civil servant, a government Minister, or indeed just a colleague trying to keep up with his thought processes.

Having earned a Masters degree in Agricultural Engineering from the University of Newcastle upon Tyne, Hamish returned to the Highlands and embarked on a journey of maverick entrepreneurship. This included managing a grass drying plant, a spell as a commercial salmon fisherman, and, later, in software engineering. He also found time to become an elected member of Highland Council, robustly representing the interests of his constituents and leaving political opponents in no doubt of his views on their shortcomings (an infamous meeting with one M. Thatcher of Downing Street was recounted on occasion).

As Managing Director of his company, Black Isle Tech Limited, he displayed his grasp of technical skills in software (and hardware) engineering, but also visionary leadership in process design and strategic planning. His software and database designs were (and remain) invaluable to various organisations, most significantly in the design and development of the ScotEID system.

Those who knew him will recognise and value this legacy, achieved through force of a larger-than-life personality, twinned with immense talent and a drive for hard work - but also a sense of fun and mischievousness once you got to know him.

Hamish’s exemplary passion for his work and his contribution to Scotland will be remembered by all those whose lives he touched. May his legacy inspire those who follow to honour and emulate his brilliance, kindness, and dedication to making the world a better place. May he rest in peace. Hamish is pictured above with his youngest grandson, Gregor.

Thanks to Bob Yuill for sharing his thoughts.

The latest round of projects aimed at tackling climate change have received funding worth more than £240,000 from the Knowledge Transfer and Innovation Fund, which encourages rural businesses to work together sharing knowledge and skills.

Pictured right, Deputy First Minister, Shona Robison, marked the announcement at Marshill Farm, North Lanarkshire, part of the Scottish Organic Dairy Goals 2023 project, a network of 21 organic dairy producers sharing ideas and techniques to improve efficiency and their environmental practices. The network was awarded more than £28,000.

Ms Robison said: “Congratulations to all the successful recipients. Industry-led projects such as these prove that agriculture and strong environmental practices can go hand in hand. By providing this funding, the Scottish Government aims to help them share knowledge – supporting innovation and allowing them to become more efficient.

“We are determined to support our rural communities and businesses, which play an important role in achieving a growing, fairer and greener economy with wellbeing at its heart. That is why we are developing a Rural Delivery Plan, which will show how all parts of the Scottish Government are delivering for rural Scotland.”

The successful projects for this round of funding are:

Scottish Organic Dairy Goals 2023, facilitated by SAOS member, Scottish Organic Milk Producers - awarded £28,427.25 (More on this project below.)

Agroecology: strengthening livelihoods, facilitated by Nourish Scotland - awarded £145,650 for its work encouraging farmers, growers and crofters to work together to adopt more agroecological practices.

Data Driven Decisions in Potatoes, facilitated by SAOS - awarded £25,575. This is the second phase of the project helping potato growers become more productive and sustainable, reducing their impact on the environment.

Decarbonising Scottish Malting Barley production, also facilitated by SAOS, awarded £43,260. This is another second phase. This project is helping arable growers transition to lower carbon production systems for malting barley.

There was welcome news for the dairy farmers of the Scottish Organic Milk Producers association when they were successful in their application for KTIF funding for their Scottish Organic Dairy Goals 2023 project. Helping formalise farm benchmarking and better group support, the project aims to improve technical efficiency as well as better understanding of welfare, environmental and biodiversity metrics for greater integrity and marketability of Scottish organic dairy.

The farmer co-op represents the majority of organic dairy farms in Scotland, although Chairman, Ross Paton, is keen to stress that “elements of the project will be of interest to all organic and even some conventional producers and although the benchmarking piece is more sensitive, any organic dairy farm can join.” He continued: “I’d also like to see the next generation freeing themselves from the farm to get more involved in this as they are the future of organic dairy, and they need to be out there meeting likeminded people to be challenged and think about what they want to achieve at home.”

Whilst the organic milk price has improved, cost inflation has increased more quickly, narrowing margins and stressing viability. SAOS’s Head of Co-op Development, Robert Logan, noted: “We play a small part in helping our members and other groups of producers trying to achieve more and find solutions by working together. It is great to see Scottish Government also recognises proactive people co-operating to achieve more that, in turn, benefits family farms, supply chains, and communities.”

The project looks to set foundations formalising a simple but meaningful approach for organic farm data capture, benchmarking, and group engagement, to help inform on-farm decision making. It is seen as an important step for the sector and Scottish Organic Milk Producers and is due to be completed by March 2024.

Robert continued: “Although small, it is an important sector. It is also not a typical group due to its wide geographical member spread, so we will approach this slightly differently to ensure the greatest benefit. We are pulling in a really good team to help on dairy, environment, soils, and legumes for this. A key benefit is that as the co-op already exists, and will act as a natural springboard from which to share and progress ideas and support change.”

A welcome boost for Scottish pig farmers is now available on supermarket shelves with a new, dedicated Scottish pigmeat brand. The range of sausages and bacon is being trialled by several multiple retailers over the next few months, under the brand “The Kilted Pork Co.” Look out for the eye-catching tartan packaging and the Specially Selected Pork brand. Scottish provenance is key for the product range and these are the only pork products available in supermarkets that are guaranteed to be made only from Scottish pigs.

The last few years have seen the Scottish pig sector face more that its fair share of challenges. In 2016, a collaboration between co-ops Scotlean and Scottish Pig Producers with Tulip saw them create Quality Pork Processors Limited and take over the Brechin abattoir plant to secure processing for Scottish pigs. The plant was dealing with 6,000 bacon pigs and 200 sows per week before it was hit by fire in 2017. After rebuilding and reopening, it was then forced to freeze production in 2018 due to CO2 supply issues. Operations had to be suspended yet again in January last year due to an outbreak of Covid in the workforce, which consequently led to the loss of their export licence to China. All these factors led to financial struggles and doubts for its future, with many of its farmer producers in a similar situation.

Andy McGowan, Managing Director of Scottish Pig Producers, explains: “There was a very real risk that large-scale pig processing would stop altogether in Scotland, which would have been a disaster for the family farms that produce high quality livestock in such an efficient way. Achieving an orderly transfer of ownership whilst keeping Brechin abattoir open was not straightforward and we need to recognise the extensive support received from many industry organisations and Scottish Government, along with funding from Opportunity North-East.”

Browns Food Group took ownership in January 2022. The meat processing company based in Scotland also produces brands such as Halls Wee Willie Winkies and Tarbert Fine Foods. Their commitment to the supply chain has been clear to see with substantial investments both at Brechin abattoir and further through the supply chain.

As we go to press, the Kilted Pork Co products are available in ASDA stores in the central belt, but they will be available in several multiple retailers more widely over the coming months. Please give them a try if you see them and support your local pig producers!

Publication of First Milk’s annual return to the end of March 31st, confirmed the co-op’s improved total returns to its farmer members, continued increased turnover, profitable growth and progress on its capital investment plans.

Key highlights include:

• Turnover up by 38% to £456m (2022: £331m)

• Operating profit (before exceptional items) stable at £5.1m (2022: £5.1m)

• Capital investment of £7.4m completed (2022: £15.5m)

• Average member milk price increased year on year by 14.4ppl (an additional £105m paid out to members in the year)

• Rising milk prices increased working capital requirements, cheese stock value increased by £32.5m, leading to net debt increasing to £63.9m (2022: £43.4m)

• New partnership agreed with Arla Foods Ingredients to produce a specialist whey powder at Lake District Creamery

• New corporate rebrand rolled out to align visual identity with long-term purpose and goals

• Certified B Corporation status confirmed

• King’s Award for Enterprise for Sustainable Development awarded

• First Milk’s Cheddar won Supreme Champion at the 2022 Global Cheese Awards

• Members committed an additional 7% of land area to regenerative practices

Commenting on the results, Shelagh Hancock, Chief Executive, (above) said: “The last year has been tumultuous, with a roller coaster ride on milk prices and energy costs creating challenges across the whole dairy supply chain, from farm to consumer. Yet, whilst these massively changing market dynamics have been challenging, the value we have in our secure contractual relationships meant that we were able to maximise the milk price paid to members as quickly as possible.

“Despite the volatile market conditions, our cheese business has continued to grow, we have completed a major investment at our Haverfordwest Creamery, and we have continued to progress our regenerative approach, receiving external acknowledgement of our progress through B Corp certification and the King’s Award for Sustainable Development.

“I am confident that we are on the right path and that growing recognition of our approach to regeneration will help to differentiate our offer and help us to deliver our vision of enriching life every day to secure the future.”