Welsh sheep and beef farmer, Rhun Williams has been analysing his farm business data and measuring its physical and financial performance, otherwise known as ‘benchmarking’, for a number of years.
As the UK prepares to leave the EU in less than six months’ time, red meat producers like Mr Williams are aware of the need to ensure farming businesses are financially fit and competitive.
In order to assist with this, a new industry initiative set to benefit the beef and sheep sectors in Wales is currently available to farmers across the country and will contribute towards preparations for an uncertain post-Brexit future.
‘Red Meat Benchmarking’ is a £2.15m project supported by the Welsh Government EU Transition Fund, which aims to increase up to 2,000 beef and sheep producers’ understanding of their costs of production and the performance of their farm businesses.
The project, delivered by red meat agency Meat Promotion Wales (HCC), with support from Farming Connect, will be an introduction to benchmarking for many farmers. Others, however, are already reaping the benefits from keeping a close eye on their figures and finances year on year.
Tregaron farmer, Mr Williams and his wife Nerys bought their farm in 2011 and decided to start investing some time in benchmarking.
“We began benchmarking so that we could keep a close eye on our costs of production as we had just bought the farm. We had a business plan in place in order to secure a loan, so it was essential that we were fully aware of our costs and could make improvements to our business.”
“It has been beneficial for us to compare our system with similar systems. It gives you a focus and allows you to target your business for improvements. Making minor adjustments often have a big impact on the performance of the business.”
Yr Ochor is a 50 hectare (125 acre) farm with 350-400 mules and Aberfield-cross, and 70 store cattle aged four to 20 months. An additional flock of 270 Welsh Mules graze 40ha (100 acres) of rented farm land, and these produce the replacements.
The specific areas that Mr Williams has looked at through benchmarking has been improving barren ewe rates, reducing pre-turn out lamb losses and increasing output per ewe and the way it is affecting his margins.
Mr Williams syas: “By looking at these figures and comparing them, we can set ourselves targets against other high performing businesses. This will, in turn, improve our own performance.”
“Benchmarking has led to changes in the business, and to the way I think about the business. It has made me think about increasing the performance of the farm and the business by improving what we have already got, rather than being tempted to look for more land and livestock.”
It is hoped that the farmers who get involved in the Red Meat Benchmarking project will be empowered to make positive changes to their businesses just like Mr Williams. By completing an online questionnaire on the financial and physical performance of their business, participating farmers will receive a bespoke assessment of their own data which will include anonymous comparisons with other similar businesses within the sector. A sum of £1,000 will also be paid to compensate them for their time and effort.
The data submitted will also provide the sector with detailed, up-to-date information which will be used to inform policy decisions in the future.
Mr Williams says: “If you have never done any benchmarking before and have the desire and correct mind frame to do so, my advice would be to start by concentrating on one area of the business to begin with, do not overcomplicate things and keep it as simple as possible. Then, and most importantly, you can compare your farm with other similar farms.”
“The small changes you make can have a very positive impact on your business.”
Welsh farmers who are keen to apply the benefits of benchmarking to their own businesses are encouraged to take part in the Red Meat Benchmarking project without delay.
Participation is on a first come first served basis and the application window closes on 10 December 2018.
Before starting the process, farmers should check the eligibility criteria. They must be registered with Farming Connect and have a minimum stocking level of 235 breeding ewes or 25 breeding cattle, or a combination of both. The data submitted must be from the 2016-17 or 2017-18 financial years.
HCC’s industry development manager, John Richards says: “This is a red meat producer’s opportunity to step back, assess the financial status of their business and take a really good look at how it’s performing. With Brexit just around the corner, it is crucially important that our businesses are financially fit. Now’s the time for our sector to raise its game and contribute towards the bigger picture.
“There will be direct benefits for farmers who take time to participate in the project; not only will they receive £1,000 but they will also be armed with knowledge to make informed changes to their businesses, leading to improved productivity and efficiency. This could result in more confident and competitive businesses in the future.”