How do you know how good you are?

24 September 2014

There is no doubt that modern arable farming is a rollercoaster ride. In just one year, we’ve gone from poor yields and high prices to good yields and low prices. But, which scenario is more profitable? How has your business performed compared to others? What is your cost of production? Knowing the answers to these questions is the only way to protect your profitability in the face of such volatility – if you don’t measure it, you can’t manage it.

And this is where benchmarking comes in – “the search for best practice that leads to superior performance”.  By comparing yourself with other farmers, ideally those growing similar crops in a similar area, you can find out just how good you are. You may achieve high yields, but at what cost? A grower with high costs may be better off than a grower with low costs if they’re also getting higher yields. This is why cost of production per tonne is such a key measure of performance.

AHDB Cereals & Oilseeds’ new CropBench+ programme is a very easy and effective tool for calculating costs of production. It’s free, confidential and independent and AHDB Cereals & Oilseeds will even help to input your figures if required. Just going through the process of collating your figures and calculating your cost of production is a useful management exercise, but some may find themselves asking ‘so what?’

The real value is in the comparison – it may be comparing your cost per tonne with the current price per tonne to help your marketing decisions, or it may be comparing one harvest year to another to see if your business is heading in the right direction. But, the most valuable comparison is that with your peers. If a group of growers calculate their costs of production using CropBench+, AHDB Cereals & Oilseeds can then facilitate a meeting to analyse and compare the results. This can be done anonymously if participants don’t feel comfortable with others knowing their figures – it doesn’t matter, the benefits come from the comparison and the debate that follows.

The theory is that it is rare to find a grower that is the best at everything. One may have the lowest fertiliser costs, another the lowest fuel costs and how do these costs relate to their yields? By identifying best practice in each of the components of profitability, everyone gets the opportunity to raise their game. With the current downward trend in commodity prices, seeking out every pound of profit is even more important. Incremental improvement, even if only small, is the secret of success.

So why not come along and ask some questions yourself? We’re launching two new Monitor Farms this month, and we’ve already got Monitor Farms going strong near Royston and Colchester.

There is no better way to gain knowledge than from constructive discussion with other farmers – many are already doing it, so can you.

To register your interest, email me or call me on 07964 975078.



Tim joined AHDB Cereals & Oilseeds with more than 20 years of farm business experience in the East of England. Based at Huntingdon, Tim previously worked at the CLA, where he was Regional Adviser for the East of England. Trained in agricultural business management, Tim has also worked as a farm business consultant, specialising in the direct management of farms and contracting arrangements.