21 Aug 2018
How top-performing farms use comparison to achieve
All top farmers benchmark, either formally or informally, according to AHDB’s Horizon report about what the highest achieving businesses do differently. We take a closer look at the report and the findings.
More than half of farmers operating in the bottom quartile do not realise they are under-achieving, suggesting the benefits of benchmarking or other comparable analysis could be large.
However, while all farmers might want more money, not everyone will necessarily want to become a top-performer, says the AHDB team, because that means doing things differently.
But, if you do want to move up the ranks, comparison is going to be key. In fact, the government’s Farm Business Survey suggests benchmarking is significantly related to high profitability.
The Horizon report says, essentially, ‘farms with more information make more money.’
This could be through benchmarking, discussion groups, informal discussions, regular reading (not just farming press), farm walks, or a combination of these.
Comparison allows a farmer to use other people’s knowledge to identify where performance is moving forwards and what the expectations for performance should be, says AHDB.
Eight things top-performing farmers do
What differentiates the top performing farms? While the hierarchy of importance for these factors will vary for each farm according to the system, environment, existing skills,resources and performance, AHDB’s analysis found that in the industry overall, the most important factors in priority order, are:
- 1. Minimise overhead costs
- 2. Set goals and budgets
- 3. Compare yourself with others and gather information
- 4. Understand the market
- 5. Focus on detail
- 6. Have a mindset for change and innovation
- 7. Continually improve people management
- 8. Specialise
Performance Setting KPIs is essential for measuring performance – examples include kilogram of milk solids per hectare, horsepower per hectare of arable land, or daily liveweight gain (see ‘Know your numbers and how to calculate them’ pages 3-5).
The report says: “Critically, taking that information to the farm to identify what you can do to farm more profitably is what matters.
Knowledge is only useful if you change something as a response.
” As The Anderson Centre pointed out in its ‘Best British Farmers’ report a few years ago: One thing which separates the best from the rest is willingness to change…ultimately, it is down to the business manager to make the decision to change, invest, take risks, pay for top advice and grow.”
The Anderson Centre added: “Top performers are often marginally better at everything rather than significantly better at anything.
“Marginal progress on all aspects of the business makes a considerable improvement to the overall figures.
Tips: How to use comparison to achieve
AHDB recommends the following things farmers can do to improve their performance through comparison:
- 1) Look for easily comparable data between your farm and others, such as horsepower per hectare of arable land or daily liveweight gain
- 2) Compare your staff ’s wages against wages paid by others nearby. Are you paying too much or too little?
- 3) Calculate your staff turnover. What should it be? How can you address that?
- 4) What is your stocking rate? Calculate it per unit of productivity rather than per hectare, ie, if some land is less fertile, should it have a different rate?
- 5) Calculate how much organic matter you are removing from soils and identify how it is to be replaced. Do you need to replace more to compensate for previous years’ losses? Calculate the chemical and biological value of incorporating straw into soils before baling it and exporting it off-farm
- 6) Quantify what each enterprise adds to the farm business. Do this objectively, rather than looking for justifications for keeping them. AHDB’s knowledge exchange team is there to help: ahdb.org.uk/farmexcellence
- 7) Compare contracts for your outputs with other buyers in your area
- 8) Shop around for inputs. Don’t stick with the same supplier just because you know them, it might not be the best deal
- 9) Benchmark your business for free, using Farmbench: ahdb.org.uk/farmbench
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