Understanding and benchmarking input costs has led to a complete system rethink on one Cumbrian sheep and beef farm, and helped create a more sustainable business model.
As soon as Trevor and Gemma Dobson started recording with Farmbench and identified they were spending more than £10 a lamb on bought-in feed, they knew they had to rethink their business model.
Mrs Dobson says: “On a £60-£70 lamb, it does not work. That was our first wake-up call.” It was a wake-up call which set the ball rolling towards some substantial and hard business decisions.
They have since overhauled flock management and rebranded themselves as ‘grassland farmers’ with the aim of driving down input costs.
The farm model has also changed, with the suckler cows being sold and the focus falling on the sheep instead.
All the changes have been driven by a desire to create a more sustainable and profitable business.
The Dobsons took on the tenancy at Bankwood, Appleby-in-Westmorland, five years ago.
Up until that point they had been running 500 ewes and 30 Limousin cross dairy sucklers on various 12 month grazing rights. Mrs Dobson was also working as a vet, and Mr Dobson as a shearer and sheep scanner.
The tenancy provided more scope to grow their business, while also continuing their day jobs.
Mrs Dobson says: “At the time we wanted to ringfence it and we thought we wanted to produce fat lambs for market in August and reasonable, showy store cattle to go in the Christmas markets.
The idea was to feed their lambs hard to get them away quickly and feed to produce quality beef.
Although the Dobsons were getting good prices for stock, Farmbench showed their overhead costs were so high the system was not profitable. Basic Payment Scheme payments were also late in that first trading year, which also focused the mind.
Data showed the suckler herd was the least profitable aspect of the business, largely due to the fact they could not be run on a big enough scale to dilute their high overhead costs.
The need to produce grass silage for the cattle also compromised grass availability for the ewes, which created the need to feed more concentrates to ewes and lambs.
Mrs Dobson says: “If you had asked us which was the most efficient part of the business, we would have said the suckler cows.
So we were surprised it did not compare as well to others given how efficient we thought they were.” Feed costs Attention was subsequently turned to the sheep and specifically how they could reduce feed costs.
The suckler cows were sold 12-months after inputting the data into Farmbench online.
Attending a grassland management event with New Zealand farmer, Murray Rohloff, then proved ‘the lightbulb moment’ for the Dobsons which saw the pair really drill down on forage management.
Mrs Dobson says: “He started talking about our farm in terms of units of dry matter and how to convert units of dry matter into profit.
That kind of clicked. “Your farm is a business selling a commodity – the same as a shop sells a commodity. It is easy to lose sight of the fact it is a business.”
A ‘steep learning curve’ followed around grassland management, attending numerous knowledge transfer events and joining an AHDB-funded grazing discussion group in the Eden Valley.
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"Your farm is a business selling a commodity – the same as a shop sells a commodity"
The Dobsons started their system overhaul by splitting fields in half and moving stock quicker.
They immediately noticed grass growth started to improve compared to their traditional set stocked system.
Now, grass covers are assessed using a plate meter or sward stick and fields are rotationally grazed according to grass covers.
The lambing period has also changed to better coincide with grass growth. This has helped drive down bought-in feed costs per lamb to zero – in a good year. Ewe breeding has also changed.
The Dobsons now opt for a variety of breeds, as long as they are ‘white faced dry matter converters’ which suit their forage focused system. Store cattle are now being boughtin, with numbers varying depending on feed supplies.
This builds greater flexibility into the business.
“Having store cattle means we always have tradeable stock so we can control our grazing pressure,” adds Mrs Dobson.
Grazing The cattle are out-wintered on brassicas, which are used as an entry to a grass re-seed.
Grazing cattle in such a way helps break up soils to remove the need for ploughing prior to grass establishment. “It is about everything on farm having a job,” explains Mrs Dobson.
This business-minded attitude has been one of the outcomes of getting involved with Farmbench.
This has been helped by attending a Farmbench discussion group set up by AHDB’s knowledge exchange manager Nicola Renison.
It includes three farmers from the Dobsons’ grazing discussion group.
Mr Dobson believes combining benchmarking with active group discussions is essential in order to get the most out of the process.
Having a mindset for change and constantly looking at ways to increase knowledge were some of the characteristics of top performing farms identified in AHDB’s Horizon Report – Preparing for Change.
Without such an attitude, Trevor and Gemma Dobson would not have identified weaknesses and made changes to secure their business’ future.
Mrs Dobson says: “Trevor is always Googling, listening to podcasts, going on Twitter. It is about really opening ourselves up to information and finding good people and working with them.”
Maximising output at lower cost was also seen as a necessity in the Horizon Report, with cost control and attention to detail the top two recommendations from The Farm Business Survey.
“With everything which goes into the business, we now ask ourselves; how much it is costing and what is the cost benefit,” says Mrs Dobson, adding their considerations include everything from consultants to fertiliser and nutrition.
“When you look at the figures on your own, you look at it, do not understand and put it back in the drawer,” he says.
“When you are in a group, you look at them and see how they compare and see where opportunities lie for each other.”
This was demonstrated during the March 2018 meeting. Comparing the farm’s performance with other businesses highlighted, inputs were too high for the output achieved.
They subsequently went away and identified where unnecessary expenditure was being made. This involved making numerous small changes across the business which added up to substantial savings.
For example, they swapped from an expensive, general purpose mineral bolus to a targeted, lower cost mineral.
The Farmbench process has focused attention on the areas which make the biggest difference. This helps drive costs down further, improve output and thus profitability.
Mrs Dobson concludes: “I could not see how we would make a change without having information from Farmbench. You cannot afford to make an uninformed decision.”
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