ISSUE 4

FEATURED IN THIS EDITION:

Long Pool Results and

Marketing Outlook

page 2

Benefits of being a

member of Fengrain

page 2

New Faces

page 3

Update on the

store page 3

Ely Grain Store

page 4

Welcome to the latest edition of Grain Matters, every time I write to you it seems I could start with the same introduction - “In these volatile and unpredictable times.” Once again the harvest has surprised and tested all of us with yields varying through our own region and the market has baffled us all - but at least the latest movements are in the right direction.Managing these massive fluctuations in market trends is extremely challenging and risky and at times even confuses the experts. We are not risk averse but need to be cautious when trading in this type of environment but I believe we are in safe hands with John, Kevin and our audit committee keeping a close eye on our exposure.

You may have seen an e mail recently introducing our new Marketing Director: Robert Munro. Rob joins us early in the New Year and after an induction period working with John will assume full responsibility for all our trading activities. You will have a chance to meet him at the local communications meetings we will be holding in February.

Looking back on this year’s store operations, in general some of our ideas for improving harvest intake

appeared to be of benefit and we would like to thank all members who store with us for their co-operation. There is still room for improving our service from our existing facilities and we will strive to achieve this in future.

If you have wet grain or grain that needs further processing - please give us a call. With reference to our new project with Glencore, it’s true to say that there have been some challenges at Ely, for grain bound for Ensus. These have been caused by delays in getting train movements and beyond Fengrain’s direct control. Even with these teething troubles we genuinely believe that once we are up and running, this will be a fantastic terminal for our members.

The Vendor Assured project on Soft Wheats delivered to Whitworths is taking shape, with Fengrain being given the opportunity to supply a large tonnage into their local mill. From 2011 harvest the logistics are mainly from vendor assured central and farm stores to Whitworths.

We have fantastic premiums for the correct specification of these varieties for 2010 delivered ex farm or ex store, and for harvest 2011 delivered to Fengrain or a vendor assured farm store. Why not take the opportunity of discussing these deals with your Grain Buyer now.

We have just received our final accounts for 2009 and whilst the year has been challenging for the whole industry, including Fengrain, our financial performance has been satisfactory. We have managed our cash well.

Further investments in the store have been made to improve its operational efficiency and we have acquired land to ensure the business can expand as required. We have introduced new systems and processes and have had some challenging trading and personnel issues to deal with. Our aim remains the same, to retain our independence and be the region’s best Grain storage and marketing business by offering outstanding service to our members.

Please Note:

This year we will not be publishing our annual accounts in the usual style - they will be available on the website at the top level and detailed accounts will be available to Members on request.Paul Wilkinson / CHAIRMAN

Volatile and unpredictable times

www.fengrain.co.uk

Benefits of being a member of Fengrain

Long Pools Results 2009 & Marketing OutlookLooking forward to the 2010/11 marketing year, and low mycotoxin levels have once again presented excellent opportunities for the supply of good milling wheat to our customers. The poor standard of wheat crops in Germany have enabled us to make shipments of varying grades of hard milling wheat both to Germany and

the Low Countries and we look forward to that trend continuing.

The arrangements to supply the bio-ethanol plant in the North East will replace, to a large degree, our programme of feed wheat sales abroad. A reduced crop of oilseed rape within the European Union has also created opportunities for Fengrain to export this

product, with a consistent sales pipeline that began in August and continues up until November.

The high level of national shipments leaving these shores may create a very interesting situation by the end of the calendar year as the estimated surplus of both crops is not so great this season.

When deciding what should be top of the list of priorities when choosing a partner to market their grain most growers will immediately opt for the price on the day. There are however other critical factors that determine the true value of the crop and the service you receive.Fengrain are a farmer owned co-operative and operate two companies within this framework. One deals only with securing members’ grain and the other for buying from non members and trading all secured grain.

Structuring the business in this way offers benefits to reduce the tax burden and ensure members payments and assets are secure.

The structure also offers protection of funds for all members’ grain as a unique and best practice undisclosed agency agreement between Fengrain Ltd and Fengrain (Services) secures the proceeds of all members’ grain within a trust account. Such monies cannot then be claimed against by creditiors in the event that the trading company became insolvent.

The membership charge of £10 gives you a £1 stake in the business, with voting rights. We ask that members support the business by trading grain with us commercially.

All members grain sold through Fengrain is covered up to 95% by credit insurance, and because of the mutuality status of the business should there be a

problem with the merchanting side of the business then the all company assets are protected. This ensures that members get paid and their asset is secure.

Being owned by Farmers our culture is one of always trying to secure the best deal and service for our membership, any profits the business makes is primarily paid back to members as a dividend, re-invested in the business or held in Company reserves. Your Company reserves!

We always strive to give you a variety of marketing options, offer you the best price on the day, provide a polite and friendly service, and deliver your crop efficiently to a cost effective location, there are many hidden but really important benefits underpinning and supporting this to give you true security and peace of mind.

All Fengrain contracts are as per the AIC or FOSFA terms and we respectfully remind members that it is their responsibility to check all contracts for accuracy and report any anomalies to avoid future issues.

We don’t rest on our laurels and are constantly striving to improve the business to this end we would welcome any constructive criticism or new ideas.

Thank you for your support.

FENGRAIN LTD - Structure

TRUST ACCOUNT

FENGRAIN LTDMutual Services

Reserves £1.8m Reserves £0.8m

Fengrain Services Ltd

Marketing Division Storage Division

SALES TO CUSTOMERS

• 30% of tonnage turnover

• Buys from pools at net sale price

• Buys from non-members and merchants

• Buys and sells forward contracts

• Responsible for haulage & logistics costs

• Buys grain into central store

• Responsible for future activity

RIN

G F

EN

CE

D

AGENCY AGREEMENT

FengrainMarketingMembers

• Employs staff• Owns office contents• Operates pools

• Storage Members• Owns site, store & office• Provides store services

Single windowto customers

Fengrain Long Pools again achieved good results for growers, with base product feed wheat headlining a price of £102.51 per tonne.

Laura Liczbinski left in February to have her baby boy Jake and Amanda Ayers left the business in May to explore pastures new. Amy Robson has just started maternity leave after coping with transport through harvest and we are pleased to welcome Dawn McNeil who will hold the fort in Amy’s absence.

Dawn joins us as Logistics Co-ordinator and has a vast experience of transport. She has worked for large blue chip companies as well small local hauliers and for 5 years, owned and ran an HGV driving agency. Dawn will continue to work for Fengrain after Amy’s return.

We have also been delighted to welcome new team members to our grain buying department.

Lucy Rowlandson is a farmer’s daughter from Lancashire who, after two years of working in the dairy sector, has decided to focus her agricultural passion on becoming a grain buyer. This decision has coincided nicely with her relocation to Cambridgeshire. Lucy will be working alongside Bill Longford to gain experience and help develop business across the region.

Amy Bonnett joins us from Dalmark Grain where she gained experience of the industry by working in transport and the laboratory before becoming a Farm Trader for the last two years. She joins Fengrain to work alongside Sarah Fowler looking after local members.

New Faces

People As many of you are aware Craig Coleman our store manager was tragically killed in a motor cycle accident in July of this year just prior to harvest.At extremely short notice Roger Spendelow - or “Spenny” to his friends - was called upon to manage harvest intake along with the store team. They handled the situation with real enthusiasm and hard work and have received compliments for their efforts from many store owners.

Roger was promoted to Store Controller during harvest and will manage the team and improvement projects going forward. We have also recruited Julian Beatty who will join us in November to support him as Site Engineer.

Store Developments Further to our communications to you with regards to the developments of the store, we are pleased to confirm that planning permission has now been granted and our grant application is being considered. Unfortunately building costs of the project have increased to around £3m but we believe the investment will complete the upgrading of the Alan Day part of the site to an independent 65,000t efficient vendor assured grain store of the future.

Once the board is aware of the level of grant available to us they will confirm the project based on level of investment that Fengrain can afford.

The first phase of work will consist of developing the intake

building and we hope to begin in February of 2011 and be able to use part of the new infrastructure at harvest next year.

All companies have changes but it has been pretty busy here at Fengrain over the last few months.

Dawn McNeil / LOGISTICS CO-ORDINATOR

Lucy Rowlandson / GRAIN BUYER

Update on the Store Amy Bonnett / GRAIN BUYER

Grain is yet to be delivered to Ensus by train as there have been issues beyond our control but we hope to get trains running shortly and are working closely with both Glencore and the Potter Group to make it happen.

www.fengrain.co.uk and FenactiveMany thanks to you all for continuing to use our website. We will continue to use it as our main point of communication and information. Fenactive is designed to provide you with information about your grain transactions so we hope that you find it useful. If you have any suggestions or feedback regarding either service, we would like to hear them.

Power Outages We have been experiencing intermittent power supply issues throughout harvest, which has so far caused five power outages.

Upon investigation, we found that Fengrain are supplied on a single spur power line via the EDF network.

To reduce the amount of cuts, we need to upgrade our power requirements and whilst EDF have quoted for this work, it is unrealistic and prohibitive, so we are considering alternatives. We are also considering a campaign against EDF as they do not seem to accept their responsibilities in our supply issues. We would like to ask for your support in this campaign. Please check the website regularly for the latest updates.

Future Editions of Grain MattersAs we have highlighted previously all future Editions of Grain Matters will be e mailed in a pdf version so that you can print them off at home if you so wish.

There will however be a limited print run available for members without email. The key reasons for this switch are to speed up the process, reduce printing costs and reduce paper waste and reduce our carbon emissions.

Ely Grain StoreWe have begun to fulfill our obligations to supply the bioethanol plant at Teeside and have so far delivered over 10,000 tonnes of feed wheat to the grain terminal in Ely.

designed & produced by www.finedesign.ltd.uk 01354 650 679

Fengrain Ltd, Hook LaneWimblington, March, Cambridgeshire PE15 0QN

Tel: +44 (0)1354 740 691Fax: +44 (0)1354 740 065E.mail: enquiry@fengrain.co.uk

www.fengrain.co.uk