Farm size doesn’t matter after all

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The AHDB Monitor Farm in Leicester hosted a meeting in January to explore what makes a farm resilient.

Arable farmers often hear that expanding their arable operation leads to lower costs of production. But according to Harry Henderson, AHDB Knowledge Exchange Manager, and a recent AHDB Horizon report ‘Brexit Scenarios, an impact assessment’, this isn’t necessarily the case.

It was a view also shared by the three main speakers of the event. When describing what makes a resilient business, none of them chose size. Instead, their keys to resilient businesses were collaboration, adaptability and diversification.

Charles Matts set up Brixworth Farming Company in the year 2000 after a number of lean years in the late 1990s. He wanted his business to be more efficient, making better use of his time and resources. Through collaboration with three other partners under the Brixworth Farming Company – a joint venture – the group of farmers halved their total horsepower at harvest and reduced their annual labour requirements by more than half.

Charles said: “I’m not here to say that what we do is right, but what works for us. It’s impossible to say that size is the only thing that matters.

“Our policy in collaboration is to keep it simple, with common agronomy and a joined-up approach to crop planning. In the future I’d like to continue to collaborate in imaginative ways, bringing in both horizontal and vertical [supply chain]integration and developing our top-class team.”

Collaboration in a joint venture like Brixworth Farming takes time and careful negotiation, Harry added, with clear roles, responsibilities and expectations being vital.

While size doesn’t necessarily matter to the farm’s final performance, there are differences between bigger and smaller farm businesses. However, regardless of size, a farm business needs to be adaptable to survive.

Richard Quinn, Chief Executive of Farmcare said: “Perhaps smaller businesses can be more agile. On the other hand, scale can provide some benefits. But really, it’s a debate that’s been going on since the early twentieth century and it’s not just the agricultural sector that’s asking the question – how big is right?

“The key thing to ask is: what are the issues in my business and how do I deal with them? Resilient businesses can adapt to change. We can all make every hectare we have work. The key is resilience and adaptability.”

Nick Tilt runs the 220ha High Meadow Farm near Ludlow, Shropshire in partnership with his wife Louise and for them, diversification is the key.

“I think it’s better to have ten lots of £30K income than one lot of £300K income stream to minimise our risk,” he said.

Nick has 150ha arable land plus laying hens, dairy heifers, tack sheep in the winter and property, both residential and commercial. Their financial discipline is strict, with a target of 20 per cent return on investment on every enterprise in the business.

Harry Henderson said: There is really no single answer to build resilience, but I would say – farm smarter, not harder.

Harry said: “Through benchmarking with Farmbench farmers have found that gaining more hectares to spread cost has not resulted in its original objective. In fact, cost creep, where a slightly bigger tractor, extra labour, more roadwork, unplanned field maintenance and a reduction in attention to detail – leading to declining yields – all add up to the additional land being subsidised by the home farm.

“Farming smarter is using tools like Farmbench to benchmark, improving output while containing costs, and as we’ve heard today, focusing on performance, not size.”

The next meeting of the Leicester Monitor Farm is on 6 February 2018 at 8am when the topic will be succession and tax.

AHDB Monitor Farms bring together groups of farmers who want to improve their businesses by sharing performance information and best practice around a nationwide network of more than 30 host farms. Monitor Farms are part of AHDB’s wider Farm Excellence Platform, which works with the industry to improve performance through knowledge exchange and benchmarking with AHDB’s Farmbench.

Farmbench helps farmers to understand and compare full costs of production at both enterprise and whole-farm level.

cereals.ahdb.org.uk/monitorfarms and farmbench.org.uk

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