Arable farmers looking to make their businesses more resilient as direct payments are phased out are being encouraged to benchmark their performance to help identify where they can cut costs and improve performance.
To help arable farmers review their current business operations, Strutt & Parker is offering detailed Arable Crop Production Reviews, which can be used as the basis of a discussion about practical steps which can be taken to bring about positive change.
“We know that no two farms are the same, but by calculating their costs and considering the logistics of making a change to their strategy, growers can get some answers to some challenging questions,” said head of farming Will Gemmill.
The detailed reviews include an assessment of historic crop yields, seed, fertiliser and spray programmes, along with a detailed breakdown of labour, power and machinery costs.
Detailed analysis of data from a range of arable farms has already showed that low machinery and labour costs can be achieved with a range of establishment methods and are not dependent on the scale of a farm, said Mr Gemmill.
Also, it is possible for farms with mixed cultivation strategies to produce crops as competitively as farms who are direct drilling, despite having higher fuel costs.
“What many of the top-performers do have in common is low depreciation costs – which some achieve by operating over a large area, but can be the result of keeping machines for longer and making sure they are well maintained so they keep their value,” he said.
A recent arable crop production review carried out on a 400 ha farm in the East of England found that the operational costs of growing a hectare of wheat was £387/ha which was above the average and down to much higher establishment and depreciation costs.
The farm is now looking at only ploughing where necessary for agronomic reasons and reducing the number of tractors from three to two with a hire tractor for use at the peak six-week harvest period.
“A review may be the catalyst for people to consider whether it would be more economical to use a contractor, or whether there are significant cost savings to be found from changing the buying strategy on farm inputs.”
Strutt & Parker’s arable crop production reviews include:
Crop Yields – A comparison of historic performance against farms which are similar in their soil type, geographic location and management operation.
Inputs – A review of the seed, fertiliser and spray programmes applied, along with individual price benchmarking for selected spray products against the Strutt & Parker buying group.
Labour – A review of the labour profile of the business and how it compares with others in terms of both training/skill level and cost per hectare (including benefits such as accommodation).
Power and machinery – A detailed breakdown of power and machinery costs including an accurate cost review for each machine and actual costs for each operation (ie ploughing, drilling and combining) to create an operational cost for each crop type.
Recommendations – A personalised summary of recommendations which can be used to review overall profitability and advice on the practical steps that can be taken to make a positive change on farm.