The nature of farming is changing. Gone are the days of simply performing well in the field, now farmers also need to be excellent business operators, with clear, resilient strategies in place to remain competitive and profitable.
“It’s easy to forget about business resilience when focussing on the day-to-day aspects of farming, but with the uncertainty of Brexit ahead, farmers need to get their financial house in order,” says Jon Day, director of the Cereals Event. “There are many strands to consider, so it can be useful to draw on a range of expert advice, plenty of which will be on offer at Cereals 2018.”
According to Graham Redman, partner at Andersons Farm Business Consultants, there are many different ways to make a business more efficient, therefore, it is important to look at all the options available. “Sometimes it’s about making the business smaller, sometimes it’s about working together in a joint venture. It could be the restructuring of an overdraft. Whatever the answer, farmers should take the opportunity before the Brexit effect kicks in to make sure their structure is right to maximise profit and reduce costs.”
Andersons’ Loam Farm model will be on display at this year’s Cereals Event, so visitors can compare costings and seek business advice from on-hand experts. “We will also be working with supply chain companies through our agri-business research team so that they understand the implications of Brexit and identify the opportunities that will inevitably arise.”
Technological developments are increasing precision and efficiencies on farm, and with that brings the potential to cut costs. Among these, is Hands Free Hectare (HFH) the latest precision technology project from Harper Adams University.
Kit Franklin, lecturer and one of the lead researchers for HFH, explained that while much of the project’s technology is not yet widely available, precision farming solutions can make quick savings – both financially and for the environment. “Precision farming technology can enable you to reduce waste when you consider the use of agro-chemicals and fertiliser.
“Auto section can, for example, save you 10 to 15 per cent in chemical or nutrient use by avoiding overlap. With auto section systems costing £10,000 to £15,000, larger farming companies will find that the investment pays for itself in a single year, thanks to reduced inputs.
“This approach is also beneficial to the environment. By using technology to ensure chemicals are applied in the right place – only where they are needed – we can reduce the amount of run-off into hedges and ditches.”
The increased availability of precision technology has also led to a surge in farm data collection. However, it’s not just about how data is collected, but also how its analysed and used. Business decisions driven by farm data have proven very successful within AHDB business groups and the monitor farm programme – and now all farmers can make use of its improved FarmBench tool. “It breaks the business down into individual enterprises, so you can see what is making or losing money,” explains Doreen Anderson, Farm Benchmarking Manager at AHDB. “And it now has the ability to bring forward fixed costs from last year to reduce inputting time, calculate depreciation automatically and bench against the average, top 25% and bottom 25% of farms.”
“Often, farmers focus on reducing variable costs, but usually these are the ones with least flexibility,” explains Ms Anderson. “Once you’ve uploaded the previous year’s figures you can use them to budget for the next year. By knowing your cost of production you can sell when it’s profitable and be more in control of your business.”