How benchmarking could help you farm without support payments
When I reflect back on my first four months as your link to AHDB across East Anglia, it has been great meeting many new faces, learning more about the different farming systems and set-ups across the region and being able to get involved in thought-provoking discussions through the Monitor Farm and Arable Business Group meetings.
For those of you who may not know, the Monitor Farms tend to have an Arable Business Group that sits alongside the Monitor Farm, which focusses on benchmarking and discussions that may arise from the results. These groups tend to be a smaller group of farmers that come together to confidentially discuss their cost of production (per tonne and per hectare), variable costs, fixed costs, gross and net margins. Whichever way you like to analyse or breakdown these costs, the value is in doing the analysis and being able to discuss the differences.
The old adage that your “variable costs are fixed and your fixed costs are variable” seems to reoccur at every one of these meetings and it is drilling down in labour costs, machinery policies, fuel usage and more that can make a large difference to bottom line…..though yield and your price for your crop certainly can not be forgotten for their significant contribution.
With graphs such as the one below being shared, the importance to farm income and knowing your cost of production, becomes even more relevant.
The removal of direct support payments would have a direct effect on many arable farm businesses. Benchmarking through AHDB’s Cropbench or new Farmbench system, does not include the subsidy payments that you would receive. In this way, it is possible to take an honest look at the costs of production for your different enterprises and crops to see where changes can be made to make your farm business as resilient and ready for future changes, whatever they may be.
It is often hard to find the time in our busy working lives, to take a moment and reflect on where we are, to do the sums, to look at alternative options to go forwards. However, by benchmarking together in an Arable Business Group, for some having a deadline to enter their figures (!), and to have time to discuss where others are managing to make a difference to their costs of production whilst maintaining yields, we are able to move forward.
Perhaps we can learn from Mark Twain – come and join us in benchmarking with one of our Arable Business Groups in your area to get started…
For more information, please contact Teresa Meadows, Knowledge Exchange Manager – East Anglia, on 07387 015465 or at email@example.com