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BM AGRI
Challenges and opportunities
in record price market
Poor harvests, government incentives, low interest rates and increased shipping
costs drove up the price of grain in 2021. BM Agri had to navigate a very unusual
market that offered both challenges and opportunities.
“I’ve been in the industry for 30 years, and I’ve never seen anything Absolut Company, producer of Absolut Vodka, announced a
like this before. Price levels for all grain varieties, including sustainable new farming concept in the autumn of 2021. This means
oilseeds and fertilisers, reached an all-time high in December. that the 400 or so farms in southern Sweden that supply the company
Nobody expected that of 2021, we were anticipating the opposite.” with winter wheat have to adapt their farming to meet a number of
sustainability requirements. These requirements include reducing the
PRICES INCREASED AT ALL LEVELS use of fossil fuels, increasing traceability and enhancing biodiversity.
As a trading company, it’s vital to always be pitched correctly in Every farm has to adapt the requirements to its own unique
the market. Price increases benefit growers while making it harder circumstances and will be assessed on the basis of a points system
to sell produce with the right margins. The 2021 harvest in Sweden that will determine the amount of compensation to be received.
was significantly lower than in the previous year (5.0 million tonnes
compared with 5.7 million tonnes), which meant BM Agri had less The idea behind this is to maintain the high quality of the wheat
tradable produce and so its business was affected. Harvests in Canada constituting the main ingredient in Sweden’s most exported food
were also poorer, resulting in shortages of both oilseed rape and grain. product. These requirements will be applicable to the 2022 harvest
Prices reached new record levels in late 2021, and the price of wheat and should help to bring about a more sustainable supply chain.
rose from EUR 200 to more than EUR 300 per tonne.
GROWTH THROUGH MORE OF EVERYTHING
“It goes without saying that you can earn quite a lot of money. But BM Agri’s target for growth in the long run is to achieve a turnover of
that said, there’s more of a risk if anything happens along the way, or if SEK 1 billion. Above all, the company has to grow organically by taking
there’s a problem with stock as more capital is tied up. Many farmers on more growers and producing bigger volumes, as well as extending
are also choosing to withhold their produce to await further price its storage capacity. Turnover for 2021 as a whole amounted to SEK
increases. This makes it hard to navigate and know where the peak lies. 600 million (761).
“Shipping costs also increased during the year; not least when “Prices are higher and demand is stronger than we could ever have
it came to shipping by sea, which rose by 100 to 200 per cent and imagined, but that’s not compensation for the global grain shortage.
hampered both imports and exports. This led to a significant increase We simply have to have the produce to sell if we’re to do business
in the price of fertiliser bought by BM Agri from Russia, Poland, the and grow.”
Baltic States and Germany. Fertiliser became very expensive to
buy and sell in 2021. This also reduces exports, as they’re just too The company is expecting the market situation to be more normal
expensive given price increases throughout the value chain.” in 2022, with prices remaining high for grain, fertiliser and shipping –
albeit not as high as in 2021.
CUSTOMERS DRIVING SUSTAINABILITY SHIFT CEO Per-Arne Gustavsson
BM Agri’s wholesale operations deal with some 3,000 growers all over
Sweden. These farms supply the global food and drink industry with
wheat, malting barley and oilseeds. BM Agri’s main commodity crops
are malting barley, starch wheat and oilseed rape, and Viking Malt,
Absolut Company and AAK are its biggest customers in Sweden.
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