Do you know your costs of production

A good year or an average one? Combining has started and soon we will know the answers to questions about yield, quality and, when we have secured a price, profit.  So far the rape could have been worse, but could have been better.  Winter barley is looking good with yields above the five year average. Wheat? We will wait and see.

The past few weeks have seen all of the eight new AHDB Cereals & Oilseeds Monitor Farms hold their first open meetings. Starting in the west, Rob Fox opened up his arable enterprise and decision-making processes to public scrutiny in June, and a week or so later Mark Wood did the same near Hereford.  All of the Monitor Farm events were well attended with nearly 300 visitors in total, and common themes emerged from the discussion groups on all eight sites including soil health, long-term business viability, resilience in the face of changing weather patterns, challenging market conditions and the growing pressure from legislation.

Discussing Black -grass

Discussing black-grass at Squab Hall.

What was also clear was how few of us are really sure about production costs and hence the price at which we must sell to achieve any measure of profit.  When asked to speculate on average cost of production for a first wheat, farmers at the Driffield Monitor Farm meeting quoted a range from £110 to £255 per tonne.  There was a diverse range of understanding and approach to the way cost should be calculated in the grain store that day.  Importantly, everyone involved in that exercise signed up to join the Arable Business Group associated with the Driffield site and this has been the case at the other Monitor Farms too.  We will be collecting harvest 2014 data for benchmarking purposes from September onwards, and anyone who would like to take part or join an Arable Business Group can email their details to me or visit the new CropBench+ site.

Cost of production and benchmarking was a major theme at Cereals 2014 for AHDB Cereals & Oilseeds and drew a lot of interest from those who visited our stand – particularly in the context of falling prices and concern about quality and grain weights.

On a lighter note, I spent several fine days in June and July visiting the finalists in the Milling Wheat Challenge.  All had done an excellent job with a thorough understanding of their land and crops, and all demonstrated a real passion for growing quality wheat and securing a good premium.  Picking a winner will not be easy! The competition has been tight and it has been a privilege to visit each business and to judge the relevant crops.  My fellow judges are Martin Savage (nabim) and Mark Ireland, and time spent with them has been both informative and very enjoyable. We’ll be announcing the winners later in the year, so watch this space.

Tewkesbury -20140714-00034

Mark Ireland, Martin Savage (judges) and Joe Edwards, Boddington, finalist

Richard

Richard

Richard Meredith grew up on a family farm in Herefordshire, and is based in Ledbury. He joined AHDB first as a Regional Benchmarking Officer, providing benchmarking support to AHDB Cereals & Oilseeds, Eblex and DairyCo levy payers. Prior to that, Richard worked for five years with a machinery ring co-ordinating contracting and hire services in the agricultural and related sectors. As AHDB Cereals & Oilseeds Regional Manager, Richard is passionate about helping to strengthen UK farm businesses, making them more resilient in the long term.

LEAVE A COMMENT