The buying group is there to save you time…and it works better if it is an independent company, says Chris Behagg

High grain prices are putting a smile on arable farmers’ faces, but there is a downside to a world of vaulting commodity prices. High input costs are squeezing margins, reminding many in the industry of the old business adage about turnover being vanity and profit sanity.
Chris Behagg, chairman of the Executive Committee of Elite Farmers Trading Company, believes the important thing is confidence. “Buying groups are all about confidence,” he told Farm Business. “You want to ring up and know you’re getting it at the right price.”
You could, of course, do it yourself. “If you’ve got the tenacity to take time, you can get good deals,” he said. “Buying groups save people time.”
Mr Behagg, who farms at Fenstanton, near St Ives in Cambridgeshire, explained how he came to be involved in the setting up of Elite Farmers.
“I was keen to start again in the buying group function,” he said.
“As an arable farmer, four things are really important: fuel, seed, fertiliser and agrochemicals. I was keen to get a buying group that concentrated [on those things].”
The opportunity came when Malcolm Gregg, who has a background in agro-chemical supply, and Ian Watson, former chief executive of one of the larger buying groups, became available. What Mr Behagg didn’t want to do was to set up a conventional buying group.
“Elite is different because it’s a private business,” he said. “I’m not involved with the company. I was just someone who was keen to make it work. It’s up to Malcolm and Ian to make it work.”
Mr Gregg and Mr Watson are joint managing directors of the company. “They’re doing negotiations,” Mr Behagg said. “They know where the special deals are.”
The Elite members tend to be larger farmers – Mr Behagg put the average at 1,100 hectares.

Key requirement
The group has one particular requirement from its members: all must use an independent agronomist, a condition designed to ensure that they aren’t being persuaded to use any particular company’s products. “There has to be no coercion,” he said.
In his view, farmers are simply too busy to do what needs to be done to get the best deals. “More people are sitting on tractors and driving sprayers,” he said. “They don’t have time.”
He’s convinced that having a private company is the right approach. “Their income is made from turnover that they get from you,” he said. “A lot of buying groups charge a turnover fee. The way we’ve done it, the price you’re quoted is the price you pay. It’s basic and simple,” he said. “It was an evolution.”
Mr Gregg described how he became involved with the company: “I worked for a major distributor, Ian worked for a major buying group. Both of us worked with large growers, with independent agronomists. These buyers weren’t getting the attention or the prices they wanted from the traditional buyer.”
Mr Gregg was also keen on the basic idea of an independent company. “If we don’t do the business, we won’t make the money,” he pointed out.