Alot of time can be spent trying to shave costs and improve farm efficiencies, but without knowing how your performance compares with other systems, how do you know how well you are doing?
That was the attitude of arable farmer and contractor Dan Willis, before deciding to sign up to AHDB’s Farmbench programme. Before then, he had not done any formal benchmarking.
He says: “I suppose I have, in a subconscious fashion, as you look at costs. But doing it in a public sense is a different ball game. I was very keen to do that.”
The farm’s fairly low-yielding land means it is particularly important to keep costs down without cutting corners.
At the same time, it is essential the team delivers results for their contract farming customers. Mr Willis says: “We need to be responsible and accountable and make a profit for them.”
As a result, in October 2018, he started working with Leo Page, of Strutt and Parker, who runs the Farmbench group in the area.
Six similar arable systems were signed up to the programme, allowing anonymous performance comparisons to be made within the group.
Mr Willis says: “It was really interesting to see what other people are doing to benefit their bottom line. The bottom line is key, otherwise you do not have money to reinvest.”
Sharing ideas and discussing issues was also another advantage of the farmer discussion groups.
He says: “I think the main benefit is a lot more openness with fellow farmers, a willingness to collaborate figures as a group and a willingness to meet up again off our own backs, which has been a positive outcome.
“As has highlighting what we are doing, what we should be doing and areas to save money to add to the bottom line.”
"Get involved. It is going to take a day out of winter. Have a day off shooting"
Overall, the Farmbench process underlined five main areas for attention:
The initial process of collating key cost and performance data for benchmarking highlighted the need to move to a computer management system.
Mr Willis says: “Although not overly complicated, it took a long time to drag it out of the computer. It was damn hard work. The system had probably made a three-hour meeting into a six-hour meeting, as it was difficult to pull data out and analyse it.”
Having adopted a ‘halfway house’ between paper and Gatekeeper for a number of years, taking part in Farmbench pushed Mr Willis to move everything to Gatekeeper. This has enabled much more sophisticated recording and data analysis. “I am pleased. That was a positive result.”
Having worked to reduce the farm’s herbicide and fungicide costs, Mr Willis was keen to see how they compared with other farms.
In recent years, the business has focused on a more preventative strategy, using traditional chemistry applied in an earlier time slot. Fungicide costs in particular have been slashed due to a complete management overhaul.
Mr Willis says: “Getting cattle back on the land and using the forage crops as a break crop, particularly short-term silage leys, have been instrumental in that.
We are not dealing with acres and acres of black-grass.” This means the business is achieving more than 95 per cent control of black-grass. As a result, agronomy costs compared favourably with the group.
Having moved to direct drilling, Mr Willis was keen to see how the business’ establishment costs compared with other enterprises.
Although there was only one other farm undertaking direct drilling in the Farmbench group, figures highlighted they were ‘on point’ with their costs.
“Where we are direct drilling, we know we cannot cut our costs any more.”
Do you know exactly how much it costs to produce every crop?
According to Dan Willis, this is a parameter every farmer should have at their fingertips. This sentiment is backed up by AHDB’s Horizon report ‘Preparing for change: the characteristics of top performing farms’.
The report clearly found attention to detail and drive for improvement is common among the top 25 per cent of farms.
Mr Willis says: “If you know your costs, you can farm better. We have all looked at niche crops. They can earn you money, but it can be short-lived and not as profitable as you think.
“I have tried lupins and soyabean over the years, but, when you look at staples, such as wheat, they work out better.”
With that in mind, he thinks it is important to do the maths and work out costs per tonne of every crop grown. “If you know your costs, you can make decisions earlier.”
Farmbench showed crop yields did not reflect the amount of fertiliser being used, leading to a complete shake-up in crop nutrition this season.
Now, rather than applying nitro- gen in a three-way split on wheat, it is applied ‘little and often’ in a five-way split. This means applications can be more tailored to the crop’s needs.
“We are now applying what the plant requires, rather than to calendar times,” explains Mr Willis.
He has also made the shift to using ammonium nitrate, instead of urea plus sulphur, which is achieving a better response.
P and K is also applied as straights in spring, rather than blanket applied in autumn. This has increased application and product costs, but led to a yield response.
“On 200 hectares of wheat cut, we have seen a 35 per cent increase in yield. Half of that is probably down to fertiliser regime and 10 per cent due to fungicide regime, as we are free of fusarium. The rest is probably weather.”
The fact that other farmers in the group were achieving better pricing has made Mr Willis reassess his grain marketing technique.
Traditionally, he has done his own marketing, with 30 per cent going through the CMG Unicorn Group.
Although the exact strategies used by others were not discussed at the time, Mr Willis is considering using some of the grain pools, rather than direct selling, or using an independent consultant to advise on the market.
Overall, Mr Willis believes there is huge potential for all farmers to benefit from undertaking farm benchmarking.
Although it takes some time to gather performance data initially, he thinks it is time well spent. He says: “Get involved. It is going to take a day out of winter.
Have a day off shooting. “Take some time, especially through winter. Sit down and have a look at it. You can make a difference. “It is your information. It might take 10 hours, but it could be the best 10 hours of your life.”
For more AHDB information, go to www.ahdb.org.uk