Arable benchmarking will help farms to get match fit for the future

Farming businesses need to be as fit as possible to be able to cope with and seize the opportunities that the changes they are facing are creating.

Strutt & Parker has recently completed a detailed benchmarking exercise for the AHDB Monitor Farms in England and Scotland.

It involved undertaking costs reviews of the labour and machinery used on the Monitor Farms to a level of detail which has not previously been done within generic farm benchmarking.

To help arable farmers review their current business operations, Strutt & Parker is now offering detailed Arable Crop Production Reviews.

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 searching questions.

These could include: Would hiring a machine be more economical for the hours it does, could a contractor do the same job at the same cost or could sharing a combine with a neighbour work logistically?

Case study

For example, 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 a joint venture would be a better way forward or a continued approach to improve cost efficiencies. We are involved with a wide range of joint ventures from full collaboration to partial and full Contract Farming Agreements.

Equally, a review can also highlight how much of a saving could be made by changing the buying strategy on inputs.

For example, looking at the price of three commonly-used chemicals applied during the 2017 harvest we found that growers who bought through our Best Buys service made a 30% saving compared with those paying a serviced price for product.

It is interesting to note that our research suggests that there is no obvious relationship between the size of the farm and its costs.

We have also seen that farms with the lowest costs do not necessarily have less horsepower available – just cheaper horsepower. This might be achieved by operating over a large area, but can also be the result of where machines are being kept for longer and residual values kept high through regular maintenance.

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, during the 2017 Harvest year, 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.