Administrators have been appointed at AF Biomass, a wholly owned subsidiary of the farmer-owned co-operative the AF Group.
AF Biomass, which operates across the whole of England, are straw merchants sourcing straw for the energy, food and farming sectors.
It provides straw for animal feed, animal bedding, straw-fired power stations and for use by vegetable growers.
A statement released to members said AF Biomass had 'no realistic prospect' of being able to meet its contractual obligations to supply straw to the power stations.
It added that the market had 'changed dramatically' since the company was established, in 2013.
"In these circumstances, the directors have been advised that AF Biomass is insolvent and cannot continue to trade," the statement said.
"It has therefore been decided to appoint administrators to oversee the administration of AF Biomass Ltd."
It added: "An inter company debt of £1m owed by AF Biomass to AF Group will not be fully recovered by the administrator.
"However, AF members who supplied straw in 2021 have been paid."
