Arable farmers looking to get their business in the best possible shape ahead of the UK leaving the EU are being encouraged to look at six ‘easy to calculate’ management benchmarks as a useful starting point.
“For some farmers, the word ‘benchmarking’ conjures up a dry and tedious process they’d rather not undertake, but it can be invaluable,” says Will Gemmill, head of farming at Strutt & Parker. “So we have come up with a set of simple management Key Performance Indicators (KPIs) that growers should be able to calculate without needing to delve into the details of their accounts.
“The figures, which are based on data we have captured from more than 145 farms, ranging from 100ha to 2500ha, will give an indication of how your farm compares in terms of labour and machinery costs and capacity. This can highlight areas where costs savings might be found and where it might be beneficial to dig deeper into the financials.
The six KPIs are as follows:
- Cropped hectares per arable labour unit
- Litres of gas oil per cropped hectare
- Horsepower per cropped hectare
- Drilled hectares per metre of drill
- Cropped hectares per metre of sprayer boom
- Combined hectares per metre of combine
Mr Gemmill said farming businesses needed to be as fit as possible to cope with the reduction or even loss of direct support payments, currently worth more than £200/ha, so the need to cut costs and improve efficiency was a pressing reality.
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 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 such as: 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?” said Mr Gemmill.